With the recent crackdown by the Australian Competition and Consumer Commission (ACCC) on unfair contract terms in online contracts, the question whether website operators terms and conditions are contractually binding has risen again. This is commonly referred to as the click wrap vs browse wrap debate.
Despite the paucity of Australian case law on this issue, the case of eBay International AG v Creative Festival Entertainment Pty Limited (ACN 098 183 281) [2006] FCA 1768 (18 December 2006) (eBay) provides guidance on how a court is likely to determine whether or not the terms and conditions on a website will form a binding contract.
In eBay, the question for determination was whether the operator of the website (Creative) had engaged in misleading and deceptive conduct by including a condition that tickets resold via online auction sites could be cancelled if onsold. The Court held that the relevant conditions “conveyed a misleading representation that the seller is legally entitled to and would detect and cancel any ticket which is resold for profit and the holder of that ticket would be refused entry to the event“.
What was the Court’s reasoning?
In arriving at the conclusion that it did, the Rares J cited various cases which were authority for the principle that the parties cannot rely on the terms and conditions of contract unless at the time the contract was made, the issuer did “all that was reasonably necessary to bring the terms to the other party’s attention“. In case this it was held to be misleading and deceptive to purport to rely on conditions which were not adequately brought to the attention of purchasers.
This case highlights the importance of getting the basics right in preparing online contracts particularly in light of the consumer protection provisions contained in the Competition and Consumer Act 2010 (Cth).
Further information
If your business needs more information about online contracts, contact us for a confidential and obligation-free discussion:
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
Related insights about online law
-
s115A Copyright Act – infringement outside Australia
This article examines the concept of shareholder oppression and provides examples of when the Court has found oppressive conduct, as well as when it has not. It also outlines the remedies the Court prefers when faced with oppressive conduct.
-
Do meta tags amount to trade mark infringement?
Find out how the case of Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554 highlights the potential risk of trademark infringements to businesses. Read more to discover the case background, takeaways, and tips to protect your business.
-
Electronic document execution by directors
The Federal Government has issued a ruling allowing companies to sign documents electronically until 6 November 2020. Find out more about how this ruling affects your business.
-
Assigning intellectual property and the right to sue
This case examines Re Taypar Pty Ltd v Benko Santic [1989] FCA 543, which determined that an assignee of intellectual property rights cannot sue for pre-assignment infringements, unless the assignment explicitly assigns a right to do so.
-
Evidence from the Wayback Machine accepted
Australian Courts are increasingly considering the use of evidence from the Wayback Machine, but questions remain as to whether they will accept such reports in practice and what will be allowed?
-
$750k awarded for fake online reviews
The Supreme Court of South Australia awarded $A750,000 in damages to a lawyer in the case of Cheng v Lok [2020] SASC 14, demonstrating the serious consequences of posting fake reviews online. Find out more about the implications of this case and alternative legal actions for companies that receive negative reviews.
