Changing Online Terms Without Notifying Customers Is A Risky Business

A recent US court ruling is a harsh reminder that unless customers are given sufficient notice of changes to online contracts (eg, subscriptions, website terms of use, conditions of sale) the changes will not be binding. The courts in many other countries, including the UK, apply the same notice rule.

Websites frequently attempt to satisfy the notice rule by including the following terms in their online contracts:

changes can be made at any time without notice; and

customers must regularly check the website for any changes to the contract terms. However, this will not always be sufficient.

A US court recently invalidated changes to an online contract for the provision of long distance telephone calls even though the changes had been made four years previously. When the customer had entered into the original contract he had also authorised regular automatic payment from his credit card. Subsequently changes were made to the online contract by the telco provider without notifying the customer. The court concluded that as the customer had no reason to re-visit the website it could not be assumed that he was aware of the changes. The customer was therefore only bound by the unamended original contract terms. It appears to us to be possible that the UK courts would have reached a similar conclusion.

In the UK, consumers (ie, individuals contracting for non-business purposes) are also given additional protection by the Unfair Terms in Consumer Contracts Regulations 1999. The regulations invalidate "unfair" terms in contracts with consumers. Several recent UK decisions have stated that a seller having the right to...