Enforceable website terms
Enforceable website terms are very important since the first matter for any court to deal with in a contract case is to decide whether the contract as a whole is effective, and then to determine whether the individual clauses within that contract are enforceable.
Some SME’s owner/managers have expressed the opinion that nobody ever reads the terms and conditions of a website. To these business owners having website terms and conditions is just a box ticking exercise to make customers and partners feel comfortable. This view, in my opinion, are the type of business owners that will have issues with enforceable website terms.
Other SME’s do not consider enforceable website terms as a box ticking exercise but are focused on outcome. Their question to me is “what is the outcome for their business, partners and customers of having enforceable website terms?” To my mind, if a business is to be successful it would be wise to focus on the outcome of its terms and conditions of business rather than just simply ticking a box.
This advice applies both while the going is good and in the bad times. While the going is good website terms have the following benefits:
(i) ensure clarity of expectation as to what exactly is being provided;
(ii) are a reference document in case of confusion or misunderstanding; and
(iii) they add a level of professionalism to the business.
In bad times the website contracts protect the business. The benefit of protection is the most important of all the benefits of having website contracts.
When things cannot be resolved amicably then the details in your contracts suddenly become of vital importance because it’s those details that will protect your business when the need arises.
Drafting appropriate clauses to protect a business is not just a cut and paste exercise. Clauses that attempt to protect a business are difficult to draft as they may be inter alia ineffective or unenforceable for being unfair, a restraint of trade, a breach of competition law, a breach of regulation maintained by an authority, and a breach of fundamental human rights.
Examples of clauses that are notorious for being unenforceable include:
(i) Non-compete provision to cover customers (See Jones v. IOS (UK) Limited and another  EWHC 348 (CH), 2 March 2012).
(ii) Clauses giving rights to third parties under the Contracts Rights of Third Parties Act 1999 may be unenforceable internationally.
(iii) Arbitration clauses may be unenforceable against third parties.
(iv) Non-Solicitation and confidentiality clauses may be insufficient to cover business interests ( See Thomas v Farr plc and Hanover Park Commercial Limited  EWCA Civ 118).
(v) Clauses may be unenforceable under the Consumer Credit Act 1974.
(vi) Exclusion and limitation of liability clause.
(vii) Force Majeure and liquidated damages clause (See Tandrin Aviation Holdings Ltd v Aero Toy Store LLC  EWHC 40 (Comm)).
(viii) Jurisdiction clauses are not always effective (See Deutsche Bank A.G. & Ors -v- Asia Pacific Broadband Wireless Communications Inc & Anr  EWCA Civ 1091).
It is unwise to view website contracts as a box ticking exercise, it would be wiser to see them as an outcomes focused exercise. There is always a risk of ineffective website contracts. There is an even greater risk if there is no careful consideration of the clauses. If no thought is given to the website contracts then you are at much greater risk of little protection if the need should ever arise.
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