We’ve come across a couple of cases this year that serve as “teachable moments.” This might be the best one yet. Certainly it was a good one for Zappos.
The premise for our Lesson of the Day is that basic contract principles require, as the Court in this case said, “an offer and acceptance, meeting of the minds, and consideration” for a contract to be enforceable. This is no different on the internet then it was when agreements were pounded out on a typewriter (remember those?)
In January of this year, Zappos had a security breach in which hundreds of its customers’ personal information was accessed by hackers. (There may be lessons for data security in there as well, but the Court didn’t get into that). Some of their customers claimed that they had been damaged by this security breach, and sued.
The lesson here is pretty simple. If you want to be able to rely on contractual terms like an arbitration provision, or venue, or special disclaimers of warranty, or anything else that a customer would not otherwise have notice of, make your customers manifest their assent to those terms. You can do it by stamping the terms across the home page of the website if you want, but clickthrough agreements are probably cleaner.