Can you really use online terms and conditions to bind someone to clean your toilet

7 mins  31.07.2017 Nicole Reid
Recently a provider of free wi-fi services in the UK gained some publicity for itself by temporarily including in its terms of use a clause requiring each user of its service to undertake 1,000 hours of community service (including, yes, cleaning public toilets or, more endearingly, painting snails' shells).

Recently a provider of free wi-fi services in the UK gained some publicity for itself by temporarily including in its terms of use a clause requiring each user of its service to undertake 1,000 hours of community service (including, yes, cleaning public toilets or, more endearingly, painting snails' shells).
The clause follows in the footsteps of other weird and wonderful, or just very onerous, terms that have been used online, which include:

  • a term requiring users of free wi-fi to give up their firstborn child (another term that, thankfully, was not intended to be enforced), and
  • an end user licence agreement that contained a provision agreeing to grant 'special consideration', including financial compensation, to any person who identified the clause and emailed the organisation (apparently it took four months for the first individual to claim the prize).

The wi-fi provider said in its subsequent statement that the stunt was intended to draw attention to the lack of consumer awareness when agreeing to these types of terms, and that it would not seek to enforce the community service clause against anyone.  But, if it wanted to, could it enforce such a term anyway?

Enforceability of contract terms

Website terms are intended by organisations that use them to create a legally binding contract between themselves and users of their services.  This is generally stated in the terms themselves.

However, if the organisation does not take steps to bind users beyond merely including the terms on its website, those terms (or at least any particularly onerous provisions in them) are unlikely to be contractually enforceable.  Courts have held that, in order to be binding, written terms must be reasonably brought to the attention of the parties prior to the contract being formed.  For example, the High Court held that an exclusion term printed on a cruise ticket was not enforceable against the passenger because, at the time that the contract came into existence, there had been very little opportunity for the passenger to have read, or even become aware of the existence of, the term.  Although there was a binding contract between the parties for the provision of cruise ship services, the relevant term was not incorporated into that contract.  One of the judges found that 'different steps may be needed to bring an exemption clause to a passenger's notice, especially if the clause is an unusual one.'

On the other hand, where a term is contained in a document that is signed by a party to the contract, the general position is that, in the absence of misrepresentation or mistake as to the nature of the document being signed, the signing person will be bound by all of those terms – regardless of whether or not they read and understood them.  In a case considering a signed contract document, the High Court was dismissive of arguments that a party was obliged to bring certain types of clause in that document (for example, an exclusion clause, or alternatively an unusual exclusion clause) to the attention of the other party in order to be able to enforce such a clause.  The party was able to rely on counterparty's signature as binding the counterparty to all of the terms in the document, including the clause that was at issue.

It is not entirely clear whether a person who has clicked a button agreeing to online terms is in a position analogous to the first or second category of cases.  The Federal Court has held that an online purchase of tickets was carried out under a contract that was signed by the parties to it.  However, in that case, the purchaser had provided identifying details prior to clicking the button to accept the online terms, which may not always the case with website terms (especially where no payment is required).  Merely clicking on a button to accept terms may not necessarily be considered to be equivalent to a formal written signature that another person would rely on as being a binding agreement to all of the contract terms.  This is consistent with the approach under the various Commonwealth, State and Territory Electronic Transactions Acts, which provide that an electronic communication, in order to satisfy a requirement for a signature, must use a reliable method to identify the person and to indicate that person's agreement.

Even if it is the case that agreeing to online terms can be equivalent to a signature (in which event all of the terms would be binding, even any particular terms have not been brought to the person's attention), as the High Court has stated:

There may be cases where the circumstances in which a document is presented for signature, or the presence in it of unusual terms, could involve a misrepresentation …. There could also be circumstances in which one party would not reasonably understand another party's signature to a document as a manifestation of intent to enter into legal relations, or of assent to its terms.

It may be more likely that such arguments would be successful in cases where an individual has agreed to terms online.  If the wi-fi provider had sought to rely on the community service clause, the offering of wi-fi services without any mention of the community service required in return could have been argued to amount to a misrepresentation about the nature of the contract into which the individual was entering.  A consumer may reasonably expect exclusions of the provider's liability in agreeing to terms that they haven't read, but is less likely to expect that the contract will require them to clean toilets.

Unfair contract terms

In Australia, reliance on such contractual arguments may be unnecessary to resist the enforcement of an onerous term.  Instead, the unfair contract terms regime in Part 2-3 of the Australian Consumer Law offers what is likely to be an easier means of challenging such terms, without having to prove that they are not terms of the parties' contract.
This regime applies to standard form contracts for the supply of goods or services or a sale or grant of an interest in land where either:

  • the supply, sale or grant is to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption; or
  • one or more of the parties to the contract is a small business (being a business that employs fewer than 20 persons) and the contract is below certain financial thresholds.

A term in such a contract may be void if it is considered to be unfair, on the basis that:

  • it would cause a significant imbalance in the parties’ rights and obligations arising under the contract;
  • it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
  • it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

In considering whether a term is unfair, a court is required to take into account the transparency of the term and the contract as a whole.  On that basis, a term that is highly unusual in the context of the contract as a whole (such as a clause that is not related to the provision or use of the services that are the subject of the contract) and not specifically drawn to the counterparty's attention is more likely to be void for unfairness.

How to bind a user to clean your toilet

In order to be able to rely on being able to enforce its terms and conditions – especially if they include onerous or unusual provisions – an organisation may need to:

  • require a user to click a button and/or tick a box agreeing to the terms, prior to a contract being formed for use of the relevant service;
  • require the user to have scrolled through the terms to reach the agree button or, at a minimum, ensure that the terms are readily accessible prior to the users being asked to agree to them;
  • ideally, use some means of accurately identifying each person who has agreed to the terms;
  • include prominent wording making it clear that the agreement to the terms will form a legally binding contract on those terms; and
  • draw to the user's particular attention any especially onerous or unusual terms.

Contact

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https://www.minterellison.com/articles/can-you-really-use-online-terms-and-conditions-to-bind-someone-to-clean-your-toilet

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