Do you really agree to the terms of use?

CRX_Blog_Terms.of.us_lrg_v.1.0

How many times have you updated your smart phone’s software this year — or even this month? Every time you clicked “I Agree,” you were actually signing an electronic agreement known as a ‘click-through agreement.’

Realistically, nobody really takes the time to read the Terms and Conditions, and certainly not as readily as you would read a contract of sale for a house or an employment contract. Researchers found that reading all the privacy policies you encounter in a year would take approximately 25 days, and that is just the privacy policy. Can you imagine how much longer it would take to also read the Terms of Use or Terms and Conditions and other policies? Whether they are being read or not, can those terms and conditions that you are “agreeing to” be enforced?

Enforceability of click-through agreements

Within the EU, click-through agreements are enforceable; however, the Court of Justice of the EU (CJEU) emphasized that such agreements must take into account general European contract rules, such as those concerning the governing jurisdiction clause (the country in which one of the parties may make a claim in court). In Jaouad El Majdoub v. CarsOnTheWeb.Deutschland GmbH (C-322/14), the question arose as to whether clicking on a separate hyperlink to access the terms and conditions would qualify as a “writing or [an agreement] evidenced in writing” for the purposes of European law. The CJEU reasonably held that as long as there was the possibility of saving and printing the terms and conditions (which should include the governing jurisdiction clause), it was irrelevant as to whether such terms and conditions were made available upon registration or after such registration on the website.

However, in the EU there is the complication that while certain aspects such as the governing jurisdiction clauses are regulated at a European level, certain formalities are still governed by the individual member states and there may be slight variances in approaches towards the enforceability of a click-through agreement. In Italy, for example, the courts have generally accepted click-through agreements, but there was a particular case in 2012 involving eBay, where the Italian court held that certain clauses such as the governing jurisdiction clause must be consented to specifically via digital signature as opposed to simply clicking ‘I accept.’ In Malta, click-through agreements are generally enforceable, if the elements of a contract under Maltese law are satisfied.

Enforceability is great, but what does this mean for users?

For B2B transactions, this is all fine and dandy, because it is assumed that businesses know what they are getting into, but what about individual users who are simply updating their smart phone operating system or purchasing an app? Quick to protect the innocent consumer, the EU Directive on Consumer Rights (2011/83/EC) provides that a consumer may withdraw from an online sales contract within 14 calendar days (extended from seven calendar days, as provided in the previous directive). Note, that this is just one of the many pro-consumer rules established by this Directive in terms of online sales contracts.

Interestingly, this Directive also bans pre-checked boxes, which are typically found on travel service websites that offer additional services such as travel insurance, car rental, etc., after a consumer has purchased a flight ticket. Such services or options are often pre-checked, which means that the consumer could easily purchase additional services without realizing that they are doing so, unless they go through the mundane process of unchecking these options.

Do you agree now?

In general, click-through agreements are considered enforceable within the EU and the US. Within the EU internal market, user rights are protected by the Directive on Consumer Rights.  Although it is reasonable to assume that nobody has the time to read through the Terms of Use before clicking “I Agree,” it is useful to familiarize yourself with the directive to know about your rights as consumer.

  •  
  •  
  •  
  •  
About Rachel Gauci

Rachel Gauci serves as Legal Counsel for Credorax, forming part of the legal team in the Malta office. She has over 3 years of experience in payment services legislation and anti-money laundering law.

Adv. Gauci holds a law degree from the University of Malta. Credorax, was the subject of the case study in her doctoral dissertation entitled, 'A Critical Analysis of the Payment Services Directive and its Practical Application'.

Prior to her role as Legal Counsel, Rachel was a Compliance Officer and an Anti-Money Laundering Legal Officer at Credorax.
Rachel provides legal advice on licensing requirements, contract negotiations, and any other ancillary issues concerning merchants, as well as legal advice concerning Credorax's core regulatory issues.
Connect with her: LinkedIn