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
-
Adaptations and computer code – copyright issues
An adaption in copyright is the exclusive right of the owner of the work in question. Section 10 of the Copyright Act 1968 (Cth) (Act) defines adaption as it relates to literary works in dramatic and non-dramatic forms, in a computer program and in relation to a musical work. The rights that apply to adaptions…
-
Computer code libraries and copyright ownership
The Australian case of Redrock Holdings Pty Ltd and Hotline Communications Ltd v Hinkley [2001] VSC 91 has shed light on how the ownership of copyright in code libraries is determined. Learn more about the dispute and its implications for copyright ownership in this blog post.
-
e-Signatures – legally binding on companies?
E-signatures are becoming increasingly popular, but are they legally binding? Find out in this article, which examines the Adelaide Bank case and reveals the limitations of e-signatures when it comes to executing a deed. Click through to learn more.
-
New safety standards proposed for online platforms
The Australian Government has proposed an Online Safety Act that could significantly change the way businesses manage user-generated content online. Find out how this proposed Act could affect your business and how you can prepare for it.
-
Has my software been copied? – legal test explained
This article examines the legal test for a “substantial reproduction” of computer code, as established by the High Court in Data Access Corporation v Powerflex Services Pty Ltd [1999] HCA 49 and further discussed in subsequent cases. The Court will consider the essential features of the work to determine if there has been a substantial…
-
Technology startups – top 5 legal considerations
Start your tech startup on the right footing by considering the top five (5) legal considerations: entity structure and asset protection, intellectual property (IP), confidentiality, contracts, privacy and compliance.
