Are Non-Clickers Bound By Your SaaS Agreement?

It’s well settled that website click-wrapped agreements presented on SaaS (Software as a Service) websites and ecommerce sites are enforceable against the clicker — but what about users who access someone else’s account without clicking to agree — are they bound also?

The answer is critical to SaaS websites and ecommerce seeking to create binding agreements.

Binding Clickers To SaaS Agreements

The term “clickers” includes anyone who undertakes what attorneys call an action indicating affirmative assent to contract terms. With SaaS sites, this is usually achieved by requiring the user to click on an I ACCEPT button after presenting the user with conspicuous notice of contract terms coupled with the opportunity to review them. These agreements are typically referred to as “click-wrapped” agreements.

The most significant case regarding the enforceability of online, click-wrapped agreements against clickers is Specht v. Netscape Comms. Corp., a 2003 case in which the 2nd Circuit Court of Appeals upheld a district court decision that Netscape’s online agreement was not enforceable. By holding that the agreement was unenforceable, the reasoning of the case provided specific guidelines for enforceability.

Three additional cases regarding clickers – the Register.com case and two Ticketmaster cases – when taken together with the Specht case, make it clear that courts are most likely to enforce online agreements where the user gives express to assent to conspicuous contract terms. Express assent is usually given by clicking on an I ACCEPT button.

Binding Non-Clickers To SaaS Agreements

The term “non-clickers” includes users who access the account of a clicker without themselves clicking to agree. Recent cases suggest that non-clickers may also be bound to the contract terms.

The 2009 case of Burcham v. Expedia, Inc. involved a suit brought by Burcham (an attorney) against Expedia based on Burcham’s use of the expedia.com website to book a hotel reservation. Burcham based his suit on a Missouri consumer law claiming that Expedia knowingly misrepresented the amenities for his hotel room.

Expedia demonstrated that that Burcham’s booking was made after the presentation of a legend stating: “By continuing on you agree to the following terms and conditions”. The complete text of the agreement was presented under the legend, and in order to book a room, the “continue” button was required to be clicked.

Burcham argued that he didn’t remember the agreement, and the he may have accessed the Expedia site from someone else’s computer in his office who had established the Expedia account (i.e. someone else was the clicker). The Missouri U.S. District Court held that Burcham was bound by Expedia’s agreement.

An earlier 2004 case reached a similar result. In Motise v. America Online, Inc., a U.S. District Court in New York held that a non-clicker’s use of a clicker’s online account with America Online was bound by the click-wrapped agreement, even though the non-clicker was not presented with, and did not assent to, the agreement.

The court ruled that the non-clicker was a sub-licensee of the clicker, and was therefore bound by all of the restrictions of the click-wrapped agreement. The court noted that any other conclusion would permit non-clickers to avoid online contract terms by simply having third parties establish online accounts for them.

Conclusion

The extent to which non-clickers are bound by SaaS agreements is critical to the viability of SaaS and ecommerce websites that depend on click-wrapped agreements to regulate the use of their sites and services. The cases cited above are only the beginning of the process of development of the rules in this critical area.

Expect more judicial refinement in the near future.

Copyright © 2009 Chip Cooper

For additional information, visit our SaaS Legal Resource.

This article is provided for educational and informative purposes only. This information does not constitute legal advice, and should not be construed as such.

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