Don't find yourself in Zappos’ shoes. If you’re an online business, it’s time to take another look at your website’s terms and conditions. Sometimes the most boring page on your site can be the most important.
Unauthorised access to customer data and other security breaches seem to be a regular occurrence these days, but a recent decision by a US court in relation to shoe retailer Zappos’ data loss raises some interesting issues for online businesses.
Yes, most of us lie, and click ‘I agree’ or ‘I have read the terms’ without ever actually taking the time to do so. However, courts are usually happy to enforce clickwrap agreements because users have at least had some warning that the terms exist.
If you choose not to look at them, that’s up to you.
The court also took issue with Zappos claiming that it had the ability to change the terms at any time, although this part of the decision only related to the arbitration clause.
It’s a timely reminder that you should make sure your terms of service are suitable for your business, and not just copied and pasted from somewhere else. If you are making changes to your terms, it’s a good idea to notify existing customers of the changes.
And if you’re looking to bind your customers to an agreement, it’s essential that you get them to check or uncheck a box confirming that they’ve seen the terms before they open an account or place an order, or you may find yourself in the same situation as Zappos.
Sacha Judd is a partner at Buddle Findlay and specialises in mergers and acquisitions.
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