Are Your Terms of Service Strong Enough to Protect You?
A recent ruling by the U.S. Federal court in Nevada could mean bad news for many e-commerce and online companies.
Back in January, hackers got ahold of over 20 million customers’ email addresses, passwords, phone number, and home addresses from online footwear and clothing retailer, Zappos. Some of those customers decided to sue Zappos, who apparently believed that their terms of service would protect them. No such luck! The court just ruled that agreement completely invalid.
In order to ensure this doesn’t happen to you, we recommend the following proactive steps when it comes to your web terms:
To increase the likelihood of enforceability we recommend you do the following:
- Implement a click accept procedure at the first opportunity past casual browsing of the site (e.g. when a user opens an account, provides personal information, buying products or ordering services, requesting feedback, or signs up for further information or to participate in contests).
- Scroll-through format rather than links is preferable
2. Unilateral Clauses
Need further assistance with Intellectual Property Commercialization and Licensing, please contact Michael Morgan (mmorgan at lwlaw.com ) or Gisèle Salazar (gsalazar at lwlaw.com).
Note: the above is a general guideline only and not intended to be interpreted as specific legal advice.