Key considerations to incorporating terms of use in a website

10 Apr 2018

Understandably businesses are currently focused on GDPR compliance.  But, in my experience, some businesses with an online presence are still getting certain basics wrong, such as correctly incorporating terms of use into their websites.

Website terms of use

Website terms of use set out how visitors to the website (“users”) may use the website.  For example, they may contain: terms covering the rights of users and the business in relation to content uploaded by the user to the website; terms confirming rights of intellectual property (“IP”); or terms setting out rules about exposing the website to viruses.  If you have a website with user generated content or which contains IP which you wish to protect, for example, you should have in place terms of use.  Terms of use are separate to general terms and conditions of business which usually contain terms relating specifically to the sale of products or the provision of services by the business which runs the website.

Incorporating website terms of use

Most people (both consumers and businesses operating a website) will be familiar with the process of purchasing a product or service online and clicking a box to confirm their agreement with the terms and conditions of business.  However, in my experience, businesses are less familiar with how to correctly incorporate terms of use into their website to ensure that users are contractually bound by – as opposed to merely having notice of – those terms.

Ideally, the terms of use should be accessible from any page of the website, for example by clicking on a clearly sign-posted hyperlink at the bottom of the page.  This is referred to as a “browse-wrap”.  However, businesses should consider obtaining users agreement to the terms of use before they are able to access the website, by requiring them to click on an acceptance button.  This is referred to as a “click-wrap”.  If the terms are presented to a user for agreement after they have purchased software, but during the process of downloading or installing software or on packaging, this is referred to as a “shrink-wrap”.

The current guidance is that terms entered into through a click-wrap, should constitute a contract between the business and the website user.  With a click-wrap, the business has offered the user access to the website on certain terms, and the user has agreed to accept those terms by using the website in a certain way.  Whereas, the situation with terms entered into by a shrink-wrap is less certain.  From a consumer perspective, terms not drawn to the buyer’s attention before making the purchase (i.e. entering into the contract) are likely to be unfair and unenforceable.

On the other hand, the guidance suggests that, in the browse-wrap context, terms of use are unlikely to constitute a contract as users are merely given “notice” of the terms and there is no method for accepting the terms.

If a user has not agreed to the terms of use, by forming a contract with the business, then the business is unlikely to be able to enforce the terms of use.

Conclusion

Businesses with websites should consider how they set out the terms of use on the website and how and whether they are asking users to agree to those terms.  This is particularly relevant if the website allows user generated content or provides a licence for IP.

If you have any questions regarding website terms of use then please contact Harry Dronfield on harry.dronfield@colmancoyle.com or +44 (0)20 7354 3000.

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