Traps to Avoid When Updating Terms and Conditions Notice
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.
Rodman v. Safeway Inc.: Providing notice of changes to terms
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.
Safeway is best positioned to make sure customers are aware of changes that Safeway has made to its contract with Class Members. After making a change, Safeway can take any number of actions to alert users that the Special Terms they agreed to at registration have been altered. For instance, Safeway could ask customers to click to indicate that they agree to the new Special Terms or send all existing safeway.com customers an email in order to ensure that every consumer is aware of a change in the Special Terms prior to making a purchase. When Safeway changed the Special Terms on November 15, 2011, it opted to do neither.
Best practices for updating Terms and Conditions
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.
- 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.
- 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!