A Mention on a Web Site May Suffice to Notify a Party to an Adhesion Contract of Amendments to Such Contract
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AMENTIONONAWEBSITEMAYSUFFICETONOTIFYAPARTYTOANADHESION
CONTRACTOFAMENDMENTSTOSUCHCONTRACT
MarcelNaud*
LEGERROBICRICHARD,Lawyers,
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
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Montreal,Quebec,CanadaH2Z2B7
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CASEREPORTCANADA
Kanitzv.RogersCableInc.[2002]O.J.No.665(OntSupCt)
Facts
Inthiscase,theplaintiffs,whofiledaclassactionbeforetheOntarioSuperior
CourtofJustice,wereallegingthatthedefendant’shigh-speedInternet
accessservicewasnotcontinuallyavailableorintermittentlyavailableor
undulyslowandthatdefendantwasnonethelesscollectingpaymentsoffees
fortheservicewithoutdeduction.Thedefendant,aproviderofcable
services,wasseekingamotiontostaythatclassactiononthegroundthat
anyclaimshouldbedealtwithonlybyarbitration,asperanamendmentto
itsuseragreementaddinganarbitrationclausethereto.
Theinitialagreement,executedbyusersuponsubscriptiontodefendant’s
services,providedthatdefendantcouldamendanyportionsoftheuser
agreementandthatnotificationofamendmentswouldbemadetouserby
postingnoticesonthedefendant’swebsiteorbysendingnoticesviaemailor
postalmail.
Theaddedarbitrationclauseprovidedthatanyclaimarisingoutofthe
relationshipbetweenthedefendantandtheuserswouldbereferredtoand
determinedbyarbitration,totheexclusionofthecourts.Thisarbitrationclause
alsoincludedawaiverofanyrighttocommenceorparticipateinaclass
actionagainstthedefendant.
LEGERROBICRICHARD,2003.*Lawyer,MarcelNaudisamemberofthelawfirmLEGERROBICRICHARD,g.p.andofthe
patentandtrademarkagencyfirmROBIC,g.p..
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Thedefendantpostedtheamendedversionoftheuseragreementinthe
“customersupport”sectionofitswebsite,andmentionedthefactthatthe
agreementwasamendedinthe”NewsandHighlights”portionofthat
section’smainpageduringaone-monthperiodfollowingamendments.
Theuseragreementwasaccessiblethroughalinkfromthe”Policiesand
Agreements”pageandfromthe”RogersDocs”pageofthecustomersupport
sectionofdefendant’swebsite.Thesepagesnotablyremindedtheusersthat
theuseragreementwasperiodicallyupdatedandthattheyshouldcheckthe
siteregularlytoobtainthelatestversion.Thesepagesalsocomprisedalinein
boldprintindicatingthetimeofthelastupdatetotheagreement.
Issues
TheCourthadtodetermine(a)whethertherewas,infact,anarbitration
agreementbetweenthepartiesand,ifso,(b)whetherthatarbitration
agreementwasunconscionableandthereforeinvalidorunenforceable.
Contentionsandfindings
(a)Whetherthereisanarbitrationagreement
Plaintiffsarguedthatdefendanthadunilaterallyimposedarbitrationupon
themwithoutreasonablenotice.TheCourtfoundthatnoticewasgivenofthe
amendmentsascontemplatedbythetermsoftheuseragreement,sincethe
agreementexpresslyallowedthedefendanttogivenoticeofamendments
throughitswebsite.
Theclauseregardingamendmentsputanobligationonthecustomerto
checkthewebsitefromtimetotimetodetermineifamendmentstothe
agreementhadbeenmade.TheCourtwasoftheopinionthatuserscan
reasonablyberequiredtodosoandthatdefendantcannotbefaultedfor
havingusedonlyoneofthethreeauthorizedmethodstonotifyusersof
amendments.Sincetheplaintiffscontinuedtousetheservice,theywere
deemedtohaveacceptedtheamendments.
Plaintiffarguedthattheyweregiveninadequatenoticebecausefindingthe
agreementonthewebsitewascumbersomeandbecausethearbitration
clausewasburiedintheagreement.Theevidenceshowedthatittooka
reviewoffivescreensfromthehomepageofdefendant’swebsitetogetto
theuseragreementandthatthearbitrationclausewasaseparateclause
withitsownheadinginboldprint,displayedjustasalltheotherclausesare
displayed,and,assuch,theCourtfoundthatthelocationoftheagreement
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andofthearbitrationclausewithintheagreementdidnotjustifyplaintiffs’
characterization.
Initsreasoning,theCourtstatedthat«[i]tdoesnotseemunreasonablefor
persons,whoareseekingelectronicaccesstoallmannerofgoods,services
andproductsalongwithinformation,communication,entertainmentand
otherresources,tohavethelegalattributesoftheirrelationshipwiththevery
entitythatisprovidingsuchelectronicaccess,definedandcommunicatedto
themthroughthatelectronicformat.»
TheCourtthenconcludedthattherewasanarbitrationagreementbetween
theparties.
(b)Whetherthearbitrationagreementwasunconscionable
TheCourtconsideredthatafindingofunconscionabilityrequires(i)an
inequalityofbargainingpower,(ii)takingadvantageoftheweakerpartyby
thestrongerpartyand(iii)resultingimprovidentagreement.
Withrespecttothefirstelement,giventhattheuseragreementwasan
adhesioncontract,theCourtfoundthattheuserhadnobargainingpower
andthattheuser’ssolechoicewastoacceptorrejecttheagreementasa
whole.
Withrespecttothesecondelement,plaintiffsarguedthattheimpositionof
arbitrationandwaiverofclassactionrightswasanindicationthatdefendant
tookadvantageoftheusers.ButtheCourtfoundthatarbitrationmerely
requiredtheuserstoseekreliefinadifferentforumandhadnot,assuch,the
sameeffectasanexemptionclause.
Onthethirdelement,theplaintiffsarguedthatdefendantadoptedthe
arbitrationclausetoprecludeusersfrompursuingreliefforservicedisruptions
becauseuserswouldnotpursuearbitrationfortheamountsinvolvedonan
individualbasis.TheCourtfoundthattherewasnoevidencetosupportthis
contentionandthatifauserhadameritoriousclaimforarefundorarebate,
theuserwouldbeentitled,subjecttoarbitrator’sdiscretion,tohavehiscosts
includedintheaward.TheCourtconcludedthat”whateverconcernsthe
plaintiffshavewithrespecttotheprospectofhavingtoarbitratetheirclaims
ratherthanproceedwithaclassaction,thoseconcernscannotbeelevated
tothelevelnecessarytoconcludethatthearbitrationclauseintheuser
agreementis”sufficientlydivergentfromcommunitystandardsofcommercial
morality”astobeunconscionableandthereforeunenforceable.”
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Consequently,theCourtgrantedtheordersoughtbydefendantforthestay
oftheclassaction.
CommentsandRecommendations
Whilesomemayfindthesefindingsreassuringfortheenforceabilityof
contractualrelationshipestablishedbyelectronicmeansforInternet-related
servicesothersmayexpresslegitimateconcernsregardingtheburden
imposedonconsumerstoassessandmaintaintheextentoftheirrightsfor
thesekindsofagreements.Dependingonthestandpoint,herearesomeof
therecommendationsthatonemaydrawfromthisdecision:
Providersshould:
-considerthepossibilityofaddinganarbitrationclausewithawaiverof
classactionrightsinagreementswiththeirclients;
-payattentiontothemannerinwhichamendmentstotheiragreement
andnotificationoftheseamendmentstotheirclientscanbemade;
-makesurethattheirpagecontainingtheagreementincludeastatement
remindingyourclientsthatyouragreementwiththemmaybeperiodically
updatedandthattheyshouldcheckthesiteregularlytoobtainthelatest
versionandanindicationastothedateofthelastupdate.
–
Clientsshould:
-readallclausesofanyagreementthatbindsthemwithaproviderandifa
clauseisnotsuitabletothem,especiallyarbitrationorgoverninglaw
clauses,theyshouldnotaccepttheagreement;
-payattentiontothemannerinwhichamendmentstotheagreementand
notificationoftheseamendmentsbytheprovidercanbemade;
-monitoranyamendmentstoagreementswithproviderswhichmaymake
thetermsunacceptabletothem.
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