A recent judgement of the High Court highlights that website terms may be deemed unenforceable if they fail to form part of a binding contract or are drafted too favourably towards the website provider.
The case of Spreadex Limited v Colin Cochrane ( EWHC 1290) was an application for summary judgement by a spread betting bookmaker, who provided services over its website. The defendant, Mr. Cochrane, was a customer who had been subject to unauthorised use of his account with Spreadex, resulting in his account becoming substantially in deficit. Spreadex made a claim for recovery of the shortfall from Mr. Cochrane.
Spreadex sought to rely on the terms to which Mr. Cochrane had indicated his acceptance when he signed up to the website. The terms, forming part of lengthy documents relating to the process, were available to view via a link near the “Agree” button. At that stage, Mr. Cochrane did not place any bets, and Spreadex reserved the right (in its terms) not to accept any bet and to withdraw the service at any time.
The key term relied upon by Spreadex stated that Mr. Cochrane “will be deemed to have authorised all trading under [his] account number”.
The court refused the application for summary judgement and found in favour of Mr. Cochrane, on a number of grounds:
The circumstances of this case (insofar as they relate to online contractual procedures), are not, in my experience, unusual. Many websites have similar procedures for accepting terms, and similarly complex terms drafted in favour of the providers. These terms therefore risk unenforceability if they ever need to be relied upon. Some key suggestions to lower this risk:
Olivia Whitcroft, principal of OBEP, 15 June 2012
This article provides general information on the subject matter and is not intended to be relied upon as legal advice. If you would like to discuss this topic, please contact Olivia Whitcroft using the contact details set out here: Contact Details