Enforceability of Web-based Terms of Sale
on October 30, 2011 at 12:18 amAn article by Business Law Today from September talks about the enforceability and use of terms of sale which are based on a website entitled “Do Web-based Terms of Sale Work? Only through Incorporation by Reference”. When a business engages in a sale they engage in a contract. Sometimes the buyer signs a written contract, sometimes they affirmatively click through an option which states they agree to the purchase. However, a contract can be as simple as an agreement that the buyer will pay a certain price, and the seller will provide the item, or they can be extensive writings which include warranties, limitations of liability, disclaimers, collection provisions, attorney fee clauses and more.
In order to simply the transaction process, and for efficiency purposes, a seller can create a set of standard terms of sale which they include with all of the particular sales that take place with buyers. Traditionally, this might look like a single sheet with 8 point font writing on the front and back which includes all of the terms of the sale and is put with each of the purchase forms as a part of the sale contract. With the advent of the internet, some sellers have started to put those standard terms on their website. The question that comes up is whether those terms of sale on the website are enforceable simply because they are on the website and purport to apply to all sales by the company.
Under contract law, a buyer and seller have to agree on the terms of a sale. To be enforceable against the buyer, the buyer has to agree to those terms. The existence of terms of sale on a website that the seller intends to include, but about which the buyer is not specifically informed, or to which the buyer does not specifically agree, are generally no enforceable. In addition, simply telling the buyer that the terms of sale exist is insufficient to show that the buyer actually agreed to the terms. Accordingly, it is important that a seller specifically include in the contract that the terms are included as a part of the agreement. Only when the buyer is informed of the terms, and that those terms are incorporated into the contract to which the buyer is agreeing, can the terms be enforced.
The use of standard terms of sale on a website can be efficient and useful to a business, but the business needs to make sure that it is both informing other parties of those terms, and is obtaining the agreement of the other party to the application and inclusion of those terms.
