October 2, 2008
Clients frequently ask me, “click-wrapped”, “browse-wrapped” — what do these terms mean? Are they the typical legal mumbo jumbo?
Your Customer Agreement (often called a Subscription Agreement, Membership Agreement, or SaaS Agreement) is a so-called “click-wrapped” agreement because your customer indicates agreement by clicking on an I AGREE button. For this reason, click-wrapped agreements are usually legally enforceable provided they are presented correctly.
A recent case involving a bot’s repeated access to Southwest Airline’s site provides some insight into the answer to the first question — are browse-wrapped agreements enforceable?
The Airline “Bot” Case
In the case of Southwest Airlines v. BoardFirst, LLC, No. 3:06-cv-00891 (N.D. Tex. Sept. 12, 2007), Defendant BoardFirst utilized a software “bot” to assist passengers of Southwest Airlines to book the popular “A” group boarding passes.
The BoardFirst.com site utilized the “bot” software to book Southwest’s customers for a fee, despite Southwest’s Terms posted on its site that “use of the Southwest websites constitutes acceptance of our Terms and Conditions”. Clicking on the Terms And Conditions link sends the user to Terms which authorized use of Southwest’s site “only for personal, non-commercial purposes”. Southwest’s Terms did not require a click on an “ACCEPT” or “I AGREE” button — hence, the Terms were of the browse- wrapped variety.
Southwest sent two cease and desist letters to BoardFirst, citing its Terms and demanding that BoardFirst cease its activities in breach of the Terms. BoardFirst continued its actions, and Southwest sued.
Were Southwest’s Browse-Wrapped Terms Enforceable?
The Court noted that the validity of a browse-wrapped license turns on whether a website user has actual or constructive notice of the site’s terms and conditions prior to using the site. There was no dispute that BoardFirst had actual knowledge after receipt of Southwest’s two cease and desist letters. The Court ruled that Southwest’s Terms were enforceable against BoardFirst.
Note that the Court’s ruling stands for the proposition that browse-wrapped agreements are enforceable only if there is actual or constructive notice of the terms. This ruling is consistent with prior cases involving similar facts. Because few if any ecommerce websites provide actual or constructive notice prior to use, it follows from this reasoning that most are not enforceable as contracts.