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Weekly Updates3. Make all hyperlinks, including "Terms and Conditions," clearly visible, prominent, and highlighted. Again, the court must be satisfied that the consumer had or should have had notice of them. Bright colors, large type, bold type, and prominent location on the pages will all help.
4. Make all terms easily accessible and easily understood. The important terms should not be buried deep in the website (or somewhere else). If they are difficult to locate, easy to miss, or buried many clicks away, there is more of a chance that they will not be enforced.
5. Notify the guest by e-mail that the reservation is subject to the terms and conditions and include a hyperlink to the terms and conditions. An e-mail confirmation that only contains a hyperlink to the "Terms and Conditions" section of the website, but does not contain a notification warning, is not as strong.
6. Have the terms and conditions fully printed on any confirmation, whether sent by e-mail, fax, or in writing. While notification might occur after the reservation is made, the guest would usually still have the ability to cancel the reservation after receipt of the notice. (See Stenzel v. Dell, Inc., (16) where terms and conditions were enforced in a browse wrap agreement because written confirmations included all of the terms and conditions.)
7. Even if your website requires the click of an "I accept" icon, take steps so that you can prove, at a later date, that you did require assent and that the user did "accept." This may involve the ability to recreate or produce copies of the reservation.
Conclusion
A click wrap agreement results when a person making an online hotel reservation is required to click an "I accept" icon that usually follows and is part of the multiple-page "Terms and Conditions." Unless the user accepts, no reservation can be made and no contract is formed. Browse wrap agreements are in frequent use today, where all relevant information, including the terms and conditions, is made available to the website user prior to a reservation being made. The user is not required to look at or affirmatively agree to the terms and conditions to complete the reservation.
Many lodging companies with internet websites attempt to include favorable terms and conditions as part of any online reservation contract. These terms, intended to be enforceable in a court, will likely include a choice of law provision, where it is agreed that the laws and decisions of a specific state will be followed; a forum selection provision, where it is agreed that any disputes must be litigated in a jurisdiction in a predetermined forum; or an arbitration provision, where the parties agree to arbitrate any disputes in accordance with stated provisions.
The legal issues and questions regarding the enforceability of these terms and conditions become important when a guest from one state stays in a hotel in another state, but attempts to litigate a claim in the guest's home state court. The lodging company would assert that the forum selection and choice of law provisions posted in its website terms and conditions requires that all claims against it be litigated in its corporate home state and by applying the statutes and case law of its home state. If the terms and conditions include an arbitration provision, the lodging company would assert that the claim be must be decided in accordance with the pre-determined arbitration terms. A typical motion by the plaintiff guest would be for the home state court to decline to enforce the terms and conditions on the basis that the guest did not agree or assent to the terms and conditions or was never apprised of them or did not know about them.
While the area of law is still relatively new and still evolving, courts have generally enforced the terms and conditions contained in click wrap agreements, finding that the user manifested assent and agreement to be bound by those terms by clicking the "I accept" button as part of completing the reservation or sale. Courts have enforced the terms and conditions found in browse wrap only in limited situations and only when it became apparent at trial that the user was either aware of the terms or should have been aware of them because of prominent warning notices, because he was a frequent user of the company website, or because of actual knowledge. Most courts have refused to enforce the terms and conditions when they are dealing with a first-time user to the site without actual knowledge.
References
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Llewellyn, Karl. 1960/1996. The common law tradition. Buffalo, NY: Wm. S. Hein Publishing.
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Moringiello, Juliet M., and William L. Reynolds. 2005. Survey of the law of cyberspace: Internet contracting cases 2004-2005. Business Lawyer 61 (1): 433-47, 464.
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(1.) See Muse v. Vagabond Inn Hotel, Case No. 01-CV-106 (FB), U.S. District Court for the Eastern District of New York, U.S. Dist. LEXIS 132 (2002); King v. Best Western Country Inn, 138 F.R.D. 39, 42 (S.D.N.Y. 1991); and Greenberg v. R.S.P. Realty Corp., 22 A.D.2d 690, 253 N.Y.S.2d 344 (2d Dep't 1964).
(2.) Decker and Decker v. Circus Circus Hotel, 49 F. Supp. 2d 743 (U. S. District Court of New Jersey, 1999); and Romero v. Holiday Inn, Utrecht, Holland, Civil Action 98-2192 (U.S. District Court for the Eastern District of Pennsylvania, 1998).
(3.) 17 C.J.S. Contracts [section] 2 (1999).
(4.) Restatement (Second) of Contracts [section] 69 (1)(a) (1981).
(5.) Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593 (1991).
(6.) ProCD, Inc. v. Seidenberg, 86 F.3d 1447, 1448 (7th Cir. 1996).
(7.) Decker and Decker v. Circus Circus Hotel.
(8.) Novak v. Overture Services, Inc., 309 F. Supp. 2d 446, 452 (E. D. N. Y. 2004).
(9.) Specht v. Netscape Communications Corp., 306 F.3d 17, 38 (2d Cir. 2002).
(10.) Defontes v. Dell Computers Corporation, No. Civ. A. PC 03-2636, 2004 WL 253560, 18 (R.I. Jan. 29, 2004).
(11.) Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 404 (2d Cir. 2004).
(12.) Ibid., 404.
(13.) Cairo, Inc. v. CrossMedia Services, Inc., No. C04-04825, 4 (JW) (N.D. Ca., April 1, 2005).
(14.) Ibid., 5.
(15.) Ibid., 4.
(16.) Stenzel v. Dell, Inc., 2004 Me. 37, 870 A. 2d 133 (2005).
Robert H. Wilson, J.D., M.B.A., is a professor in the department of hospitality and tourism management in the Isenberg School of Management at the University of Massachusetts-Amherst (rwilson@ht.umass.edu).
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