A Mention on a Web Site May Suffice to Notify a Party to an Adhesion

2002-01-01

AMENTIONONAWEBSITEMAYSUFFICETONOTIFYAPARTYTOANADHESION
CONTRACTOFAMENDMENTSTOSUCHCONTRACT

MarcelNaud*
LEGERROBICRICHARD
,L.L.P.
Lawyers,PatentandTrademarkAgents
CentreCDPCapital
1001Square-Victoria–BlocE–8thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242–Fax(514)8457874
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Facts
InKanitzv.RogersCableInc.[2002]O.J.No.665(O.S.C.,NordheimerJ.),the
plaintiffsinaclassactionbeforetheOntarioSuperiorCourtofJusticewere
allegingthatthedefendant’shigh-speedInternetaccessservicewasnot
continuouslyavailableorwasonlyintermittentlyavailableorundulyslowand
thatdefendantwasnonethelesscollectingpaymentsoffeesforsuchservice
withoutanydeduction.Thedefendant,aproviderofcableservices,was
seekingamotiontostaythatclassactiononthegroundthatanyclaim
shouldbedealtwithbyarbitration,inaccordancewithanamendment
wherebyanarbitrationclausehadbeenaddedtoitsuseragreement.
Theinitialagreement,executedbyuserswhosubscribedtodefendant’s
services,providedthatdefendantcouldamendanyportionoftheuser
agreementandthatnotificationofamendmentswouldbemadetouserby
postingnoticesonthedefendant’swebsiteorbysendingnoticesviaemailor
postalmail.
Theagreementwasamendedtoincludeanarbitrationclausewhich
providedthatanyclaimarisingoutoftherelationshipbetweenthe
defendantandtheuserswouldbereferredtoanddeterminedbyarbitration,
totheexclusionofthecourts.Thisarbitrationclausealsoincludedawaiverof
anyrighttocommenceorparticipateinaclassactionagainstthe
defendant.
Thedefendantpostedtheamendedversionofitsuseragreementinthe
“customersupport”sectionofitswebsiteandmentionedthattheagreement

CIPS,2002.
*OfLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirmoflawyers,andpatentand
trademarkagents.PublishedintheSummer2002issue(Vol.6,No.3)issueofourNewsletter.
Publication068.048E.

wasamendedinthe”NewsandHighlights”portionofthatsection’smain
pageduringaone-monthperiodfollowingtheamendment.
Theuseragreementwasaccessiblethroughalinkfromthe”Policiesand
Agreements”pageandfromthe”RogersDocs”pageofthecustomersupport
sectionofdefendant’swebsite.Thesepagesnotablyremindedusersthatthe
useragreementwasperiodicallyupdatedandthattheyshouldcheckthe
siteregularlytoobtainthelatestversion.Thesepagesalsoincludedalinein
boldprintindicatingthetimeofthelastupdatetotheagreement.
Issues
TheCourthadtodetermine(a)whethertherewasinfactanarbitration
agreementbetweenthepartiesand,ifso,(b)whetherthatarbitration
agreementwasunconscionableandthereforeinvalidorunenforceable.
Contentionsandfindings
(a)Whethertherewasanarbitrationagreement
Plaintiffsarguedthatdefendanthadunilaterallyimposedarbitrationupon
themwithoutreasonablenotice.TheCourtfoundthatnoticewasgivenof
theamendmentsascontemplatedbythetermsoftheuseragreement,since
theagreementexpresslyallowedthedefendanttogivenoticeof
amendmentsthroughitswebsite.
Theclauseregardingamendmentsputanobligationoncustomerstocheck
thewebsitefromtimetotimetodetermineifamendmentstotheagreement
hadbeenmade.TheCourtwasoftheopinionthatuserscouldreasonablybe
requiredtodosoandthatdefendantcouldnotbefaultedforhavingused
onlyoneofthethreeauthorizedmethodstonotifyusersofamendments.
Sincetheplaintiffscontinuedtousetheservice,theyweredeemedtohave
acceptedtheamendments.
Plaintiffsarguedthattheyweregiveninadequatenoticebecausefindingthe
agreementonthewebsitewascumbersomeandbecausethearbitration
clausewasburiedintheagreement.Theevidenceshowedthatittooka
reviewoffivescreensfromthehomepageofdefendant’swebsitetogetto
theuseragreementandthatthearbitrationclausewasaseparateclause
withitsownheadinginboldprint,displayedlikeallotherclauses,and,as
such,theCourtfoundthatthelocationoftheagreementandofthe

arbitrationclausewithintheagreementdidnotjustifyplaintiffs’
characterization.
Initsreasoning,theCourtstatedthat“[i]tdoesnotseemunreasonablefor
persons,whoareseekingelectronicaccesstoallmannerofgoods,services
andproductsalongwithinformation,communication,entertainmentand
otherresources,tohavethelegalattributesoftheirrelationshipwiththevery
entitythatisprovidingsuchelectronicaccess,definedandcommunicatedto
themthroughthatelectronicformat.”
TheCourtthenconcludedthattherewasanarbitrationagreementbetween
theparties.
(b)Whetherthearbitrationagreementwasunconscionable
TheCourtconsideredthatafindingofunconscionabilityrequires(i)inequality
ofbargainingpower,(ii)takingadvantageoftheweakerpartybythe
strongerpartyand(iii)aresultingimprovidentagreement.
Withrespecttothefirstelement,giventhattheuseragreementwasan
adhesioncontract,theCourtfoundthattheuserhadnobargainingpower
andthattheuser’ssolechoicewastoacceptorrejecttheagreementasa
whole.
Withrespecttothesecondelement,plaintiffsarguedthattheimpositionof
arbitrationandwaiverofclassactionrightswasanindicationthatdefendant
tookadvantageoftheusers.ButtheCourtfoundthatarbitrationmerely
requiredtheuserstoseekreliefinadifferentforumand,assuch,didnothave
thesameeffectasanexemptionclause.
Onthethirdelement,theplaintiffsarguedthatdefendantadoptedthe
arbitrationclausetoprecludeusersfrompursuingreliefforservicedisruptions
becauseuserswouldnotpursuearbitrationfortheamountsinvolvedonan
individualbasis.TheCourtfoundthattherewasnoevidencetosupportthis
contentionandthatifauserhadameritoriousclaimforarefundorarebate,
theuserwouldbeentitled,subjecttothearbitrator’sdiscretion,tohavehis
costsincludedintheaward.TheCourtconcludedthat”whateverconcerns
theplaintiffshavewithrespecttotheprospectofhavingtoarbitratetheir
claimsratherthanproceedwithaclassaction,thoseconcernscannotbe
elevatedtothelevelnecessarytoconcludethatthearbitrationclauseinthe
useragreementis”sufficientlydivergentfromcommunitystandardsof
commercialmorality”astobeunconscionableandthereforeunenforceable.”

Consequently,theCourtgrantedtheordersoughtbydefendantforthestay
oftheclassaction.
CommentsandRecommendations
Whilesomemayfindthesefindingsreassuringfortheenforceabilityof
contractualrelationshipsestablishedbyelectronicmeansforInternet-related
services,othersmayexpresslegitimateconcernsregardingtheburden
imposedonconsumerstoassessanddeterminetheextentoftheirrights
underthesekindsofagreements.Dependingonthestandpoint,hereare
someoftherecommendationsthatonemaydrawfromthisdecision:
Providersshould:
-considerthepossibilityofaddinganarbitrationclausewithawaiverof
classactionrightsinagreementswiththeirclients;
-payattentiontothemannerinwhichamendmentstotheiragreement
andnotificationoftheseamendmentstotheirclientscanbemade;
-makesurethattheirpagecontainingtheagreementincludesastatement
remindingtheirclientsthattheiragreementwiththemmaybeperiodically
updatedandthattheyshouldcheckthesiteregularlytoobtainthelatest
versionandanindicationastothedateofthelastupdate.
Clientsshould:
-readallclausesofanyagreementthatbindsthemwithaproviderandifa
clauseisnotsuitabletothem,especiallyarbitrationorgoverninglaw
clauses,theyshouldnotaccepttheagreement;
-payattentiontothemannerinwhichamendmentstotheagreementand
notificationoftheseamendmentsbytheprovidercanbemade;
-monitoranyamendmentstoagreementswithproviderswhichmaymake
thetermsunacceptabletothem.

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