Internet & Social Media Law Blog
As regulations and best practices regarding online terms continues to impose increasing requirements on operators of websites, apps and online services, a basic set of online terms can now encompass as many as half a dozen documents! One just needs to glance at the footer of most any website to see the array of policies that are now needed to minimally address commercial and legal considerations. A normal schema of online terms includes: Terms of Service, an Acceptable Use Policy, a Copyright/DMCA Policy, a Privacy Policy, a Cookie Policy, and a California Privacy Notice. All of these various policies typically wrap up into the Terms of Service. From a practical standpoint, and in some instances out of legal necessity, it is best to break these policies into separate documents and utilize hyperlinks and other embedded text to create a structure that can be navigated electronically. To date, this has seemed to be a reasonable approach and is particularly favored by web and app designers who strive to create clean screens with streamlined text.
But beware—nesting hyperlinks to various policies within a master set of terms can lead to trouble.
Background
A few recent cases have forced courts to rule on the “nesting” or “hyperlinking” fact pattern, where a single “I Accept” button or text box with terms to scroll through only displays the Terms of Service or master terms, but within those terms are hyperlinks to other governing policies. In these cases, defendant companies claimed that a user’s acceptance of the master terms that had hyperlinks to other documents, implied acceptance of the nested policies. There has been some inconsistency in court rulings on this issue, with one court finding a properly formed contract (along with all subordinate nested policies), while other courts have ruled that only the first document presented to a user which was explicitly accepted represented the limited scope of the contract.
In Zamber v. Am. Airlines, Inc. (a case decided in February 2020), a website user questioned the validity of a forum selection clause because the provision was in a separate policy hyperlinked from the main set of terms. The U.S. District Court for the Southern District of Florida ruled that the contents of the nested hyperlink document formed a part of the overall contract with the user. In this case, the user was only made aware of the main terms and conditions when logging into the service. Within the main terms and conditions was a hyperlink to the policy containing the forum-selection clause. The Court found that a policy only one hyperlink removed from the terms was not overly cumbersome, and stated that the site usage policy is the “equivalent of a contractual addendum … and … enforceable.”
In a set of earlier cases, Courts focused on the lack of notice and explicit assent by users to additional or hyperlinked terms as grounds for finding nested documents did not form a part of the overall contract. In McGhee v. North American Bancard, LLC (decided in July 2017), the plaintiff company sought to enforce a forum selection provision that was one hyperlink removed from the main set of terms. The Court focused on conflicts between the main terms and the nested policy as it related to the forum selection clause, ultimately concluding that the nested provisions did not form part of the contract. In a similar case, Compass iTech, LLC v. eVestment Alliance, LLC (decided in 2016), the user provided assent to a main set of terms that included a hyperlink to additional provisions (with no further notice or direct access to the nested terms at the time of assent). The Compass Court concluded that the subordinate terms were not incorporated into the main agreement.
While the most recent Zamber case provides some reassurance, the lack of consensus amongst the courts signals that deploying nested hyperlinks represents a risk that your company may be unable to hold a user responsible for key provisions contained within a hyperlinked policy. Studying these various court decisions can be helpful to strengthen your online terms and contracting practices.
Considerations for Your Online Terms
While nested hyperlinks may make for a more organized website experience, streamlining cannot be done at the expense of a user’s notice, and does not negate the contract formation requirements of intent and acceptance. If a company wants a series of policies creating one super-framework of rights and responsibilities, then users need to understand the totality of that framework. Otherwise, courts have shown a willingness to shave off terms and narrow the scope of a company’s contract schema. Providing clarity is key, and can be achieved both in how the documents are presented, and how they are drafted. Taking a more surgical approach with nested hyperlinks will help a company reduce the risk that the courts narrow its online terms with users.
A few recommendations to minimize the risk of hyperlinked policies include:
- Update your Online Contracting Procedures: However you obtain a user’s consent, process improvements at the acceptance stage are vital. It is here you can provide the clearest information to a user about what exactly they are accepting, which in turn provides some of the strongest support you can show a court regarding notice to users and their assent. If you deploy an “I Accept” box, make clear reference to all of the policies the user is accepting. List the policies in that box and link to all of them directly. If you prompt a user to scroll through your documentation before agreeing, make sure you list all the policies that will be scrolled through, and make the user scroll through each document, not just your “main” terms. If you utilize a browse-wrap model, name every policy the user is agreeing to by continuing to use the website. The more notice and opportunity to review the various components of your online terms that you can provide users earlier on in the contracting process, the better.
- Merger and Integration Clauses: Even if your terms are hosted on different web pages, you need to do more than provide a hyperlink to properly incorporate them into your master terms. A strong merger clause that explicitly names all of the policies that form a part of the online terms being formed with the user is advisable. For example, “These Terms and Conditions, Acceptable Use Policy, and Copyright Policy, supersedes all prior agreements and forms the contract between you and [Company]. All listed policies are incorporated into these Terms and Conditions by reference.” Having inconsistent merger clauses strewn across documents, or remaining silent, erodes your argument that there is one master agreement with multiple components being formed.
- Make Links Stand Out: When you reference other policies and provide links to them in a given document, set them off from the surrounding text. Use spacing, formatting, and font size variations to draw the reader’s eye, making it harder for a user to claim that in their review of a document, they couldn’t tell that other policies were discussed. Additionally, including a short summary of the linked policy contents along with the link also helps to signal to users what material is covered.
Don’t let nesting undermine notice. When it comes to hyperlinks in your online policies, let clarity and consistency be your guide.
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