Have just read Mike O’Donnell’s latest column, and wanted to share it with you because it makes essential reading for Kiwi eCommerce operators.
Here are the most relevant points:
Broadly speaking there are two kinds of user agreements or “wraps” on eCommerce websites. One is a “click wrap” where you are presented with the terms and conditions and have to click “I agree” before proceeding.
This other is a “browse wrap” where terms and conditions are viewable on the site but your ongoing use of the site supposedly means you have agreed to them. Browse wraps do not require users to click on an “I agree” button, but assume that simply using the site signifies acceptance.
Late last year the US District Court found that eCommerce giant Zappos’ user agreement did not protect the company (or owner Amazon) from a class action brought by its customers. In fact the US Court went further than that.
First, it found the “browse wrap” style of agreement under which customers buy stuff on Zappos had no ability to bind those customers to its terms and conditions.
Second, it found a provision in Zappos’ user agreement saying it had the right to change the terms and conditions at any time (without bringing those changes to the attention of customers) was likely to be useless. The District Court called such a clause “illusory” and suggested it was unfair and likely voided an underlying arbitration clause.
Mike’s article goes on to point out that New Zealand’s own Consumer Law Reform Bill is trudging its way into the statute books, and amongst the many implications of that impending legislation are that
… the Bill prohibits businesses from having ‘unfair contract terms’ in their standard term contracts with customers … [such as] terms that allow only one party to limit performance of a contract, vary the terms, or change the price without notice.
If your ecommerce business is typical, it may well have boilerplate ‘Terms & Conditions’ that seem to reserve your right to do anything you want (without bothering to notify customers). The cruelly-exposed reality is that such T&Cs already probably mean nothing (and will mean even less in the future).
Your recommended solution? Go read the full column.