Think Before You Link: The Legal Risk of Embedded Hyperlinks in Online Terms | Pillsbury Winthrop Shaw Pittman LLP

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But beware, nesting hyperlinks to various policies within a main term set can cause problems.

Background
A few recent cases have forced the courts to rule on the “embedded” or “hyperlinked” fact model, where a single “I agree” button or text box with scrollable terms displays only the terms of Use or the General Conditions, but in these the terms are hyperlinks to other policies in force. In these cases, the defendant companies asserted that a user’s acceptance of terms and conditions containing hyperlinks to other documents implies 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 who was explicitly accepted represented the limited scope of the contract.

In Zamber v. Am. Airlines, Inc. (a case decided in February 2020), a user of the website questioned the validity of a choice of court clause because the provision was in a separate policy hyperlinked to the main set of terms. The United States District Court for the Southern District of Florida has ruled that the content of the embedded hyperlink document is part of the overall user agreement. In this case, the user only became aware of the main conditions when connecting to the service. In the main terms and conditions, there was a hyperlink to the policy containing the choice of court clause. The Court found that a policy with only one hyperlink removed from the terms was not overly burdensome and declared that the site’s usage policy is “the equivalent of a contractual endorsement…and…enforceable”.

In a series of previous cases, courts have focused on the lack of explicit user notice and assent to additional or hyperlinked terms, as the grounds for finding nested documents were not part of the overall contract. In McGhee vs. North American Bancard, LLC (decided in July 2017), the plaintiff company sought to enforce a choice of court provision which was a hyperlink removed from the main set of terms. The Court focused on the conflicts between the main terms and the nested policy with respect to the choice of court clause, ultimately concluding that the nested provisions were not part of the contract. In a similar case, Compass iTech, LLC vs. eVestment Alliance, LLC (decided in 2016), the user provided assent to a main set of terms that included a hyperlink to additional provisions (without further notice or direct access to the nested terms at the time of assent). the Compass The Court found that the subordinate terms were not incorporated into the main agreement.

While the most recent Zamber case provides some reassurance, the lack of consensus among the courts signals that deploying nested hyperlinks poses a risk that your company may not be able to hold a user accountable to key provisions contained in a hyperlinking policy. Studying these different court decisions can be helpful in strengthening your online terms and contracting practices.

Considerations for your online requirements
While nested hyperlinks may allow for a more organized website experience, streamlining cannot be at the expense of user notice and does not negate the formation requirements of the Intent and Acceptance Contract. . If a company wants a set of policies that create a super framework of rights and responsibilities, users need to understand that entire framework. Otherwise, the courts have shown a willingness to reduce the terms and narrow the scope of a company’s contractual scheme. Clarity is essential and can be achieved both in the way documents are presented and in the way they are written. Taking a more surgical approach with nested hyperlinks will help a company reduce the risk of courts restricting its online terms with users.

Here are some recommendations to minimize the risk of hyperlinked policies:

  • Update your online procurement procedures: Regardless of how you obtain user consent, process improvements at the acceptance stage are essential. This is where you can provide the clearest information to a user about exactly what they are agreeing to, which in turn provides some of the strongest support you can show a court regarding notice to users and their consent. If you deploy an “I accept” box, clearly reference all policies that the user agrees to. List the policies in this box and create a direct link to each one. If you invite a user to scroll through your documentation before accepting, be sure to list all policies that will be scrolled through and scroll through each document, not just your “core” terms. If you use a browsing model, name each policy that the user agrees to by continuing to use the website. The more notice and opportunity you have to review the various components of your online terms that you can provide to users earlier in the contracting process, the better.
  • Merger and integration clauses: Even though your terms are hosted on different web pages, you need to do more than provide a hyperlink to properly incorporate them into your terms and conditions. A strong merge clause that explicitly names all policies that are part of inline terms formed with the user is recommended. For example, “These Terms and Conditions, Acceptable Use Policy and Copyright Policy, supersede all prior agreements and constitute the contract between you and [Company]. All policies listed are incorporated into these Terms and Conditions by reference. Having inconsistent merge clauses scattered throughout documents, or remaining silent, erodes your argument that there is a framework agreement with multiple components in the process of being formed.
  • Highlight the links: When you refer to other policies and provide links to them in a given document, highlight them in relation to the surrounding text. Use variations in spacing, formatting, and font size to grab the reader’s attention, making it harder for a user to pretend that when reviewing a document, they couldn’t tell that d Other policies had been discussed. Additionally, including a brief summary of the content of the linked policy with the link also helps alert users to the material covered.

Don’t let the nesting detract from the review. When it comes to hyperlinks in your online policies, be guided by clarity and consistency.

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