In what might be a high-water mark for online vendors, a decision of the US Third Circuit Court of Appeals in Schwartz v. Comcast Corporation has upheld the terms of a subscription agreement even in the absence of any proof that the customer actually knew of, let alone assented to the terms.  This echoes the reasoning of the Supreme Court of Canada in the Dell case last year.  In Dell the online contract was referred to in a linked document, but did not appear on the sales page. It was at least arguable that a customer would be aware that a contract existed even if the customer never took the time to read those terms. 

In the Comcast case the court went one step further stating that: “in some cases, a party is excused from the terms of a contract where he never had access to the contract and thus could not make himself aware of its terms. However, in this case, the terms of the contract were available to Schwartz via the web site, and thus they are binding, despite the fact that he was unaware of them.”  The customer argued that he never received any notice of any terms and was therefore completely unaware that there were terms for him to find. 

Does this mean that merely posting the fine-print on the company website will suffice to make online terms binding?  Probably not. Comcast was able to convince the court of its practice of providing the Subscriber Agreement to all new customers.  Consistent corporate practices are critical to establishing evidence that the terms should be upheld.  Canadian courts may not go this far, but it does provide some guidance for Canadian companies doing business online with US customers.

 

Calgary – 17:00 MST