Traps to Avoid When Updating Terms and Conditions Notice

Website legal agreements, such as Terms and Conditions, Terms of Service, and Terms of Use, typically need to be revised and updated from time to time in order to add new provisions or adapt to new laws. Businesses need to ensure that when they update their Terms (especially when using a clickwrap agreement to do it), they provide notice to users and prompt them to re-accept the updated agreements. Updating your online terms is a crucial part of contract management.

Often, a website operator will simply publish a change to those terms without thinking through the update process. This can lead to disaster: i.e., to the updated terms being considered unenforceable in the event of a lawsuit. In the case of Rodman v. Safeway Inc. this resulted in a $42 million judgement against Safeway.  

This blog explains Read along to understand what happened to Safeway and how you can prevent this same thing from happening to your business.

Safeway operates an online grocery delivery service on its website, Safeway.com. When a new customer registers as a user of Safeway, they are required to click a box that states “Check this box if you agree to the Terms and Conditions.” Luckily, that qualifies as a clickwrap best practice!  

However, in November 2011, Safeway amended the Terms and Conditions in an attempt to notify customers of differences in the pricing of products between its physical stores and the delivery service. So, though the new version had the updated pricing, the old version did not.

Unfortunately for Safeway, they never gave conspicuous notice that changes had been made to the Terms and Conditions at the time those changes were made. This oversight resulted in a class action lawsuit against Safeway for grocery overpricing, in which a federal judge held that the changes to the Terms and Conditions represent an offer to which customers never expressed assent, and that therefore customers were not bound by those changes.

Updating Terms and Conditions is a normal practice, but it’s imperative that you have a proven system in place to manage versioning. This case makes it plain that simply changing website legal terms, then crossing your fingers that the changes hold up, won’t work.  

Here are some best practices to consider when updating your terms of service.   

1. Good: Emailing customers that the terms have been updated or adding a notice on the website upon sign-in to all existing users which provides a link to the new terms of service. 
2. Better: Adding a notice when existing users visit the website in which you require the user to accept the new terms by clicking a button or checking a box to proceed. This notice should include a link to the new terms.

Bonus: Explicitly calling out what’s changed.

Updating Terms and Conditions shouldn’t be a burden on businesses and legal teams. But Ironclad’s clickwrap transaction platform makes it easier than ever. See for yourself, request a demo!