Click here to bookmark Clausehound and search for clause/contract language

Choose from our expert-compiled document frameworks and customize from a vast library of clauses.

Terms of use and enforcing production of documents

 There is no legally enforceable right to obtain documents from a third party, especially if it will breach any terms of use in operation.

Often times terms of use agreements may conflict with one party’s duty, for example, a doctor’s duty to his or her patient. What is important to consider is whether a third party has contractually limited the other party’s authority through its terms of use.

In the case of Galenzoski v. Awad (2006 SKQB 124 (CanLII)), Dr. Awad(the appellant) successfully appealed a decision ordering him to furnish copies of documents that are the property of and in the possession of a third party, the Canadian Medical Protective Association. CMPA members have limited access to documents for authorized use subject to accepting the terms and conditions set out on the CMPA website.

One of the conditions for use of the material is that it must not be transmitted, published or distributed without the express prior written consent of the CMPA. That consent had been refused in this case. The court found that the judge erred in ordering him to provide copies to the respondents because the appellant did not have the right to obtain the documents without the consent of the third party.

Additionally, the appellant did not have the right to direct the third party to produce the documents because they were not within the appellant’s power. One’s duty of care must be balanced with his or her duty to comply with other contractual obligations.

To compel a party to produce documents in the possession of a third party would immediately place the user in violation of the terms of the agreement between the user and the third party, with potentially serious consequences.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

eBay? More like e-Bye! Court rejects unilateral termination of a $98K shoe sale

Source

Look at that pair of shoes. That is a nice pair of shoes. So nice, in fact, that while they retail for around $180, they end up reselling at twice that. There’s apparently a whole market for limited edition NBA All-Star sneakers like these on sites like eBay. Who would’ve thought?

In February of 2012, Montreal brothers Sandrin Thierry and Kevin Mofo Moko bought a pair of these glorious “Galaxy” Nike Air Foamposite Ones from a reseller and quickly set up an auction on eBay. They were looking to make a quick buck to ease the student life and help their parents out.

The auction rapidly gained interest, and a few hours before its end they received a bid of $98,000. Shortly after, eBay took down their auction with the vague explanation of problems with the post. There was no suspension or attempt to contact the brothers about the matter.

The brothers pursued damages, arguing that eBay had unilaterally ended their site-user agreement, an action that goes against language in both the Consumer Protection Act and the Civil Code of Québec. The latter requires adequate notice of unilateral termination to be given. A threshold for the appropriateness of unilateral termination is also given in s. 2126, where “the provider of services may not resiliate the contract unilaterally except for a serious reason, and never at an inopportune moment; otherwise, he is bound to make reparation for injury caused to the client as a result of the resiliation.”

foamposite-galaxy-main-3-960x640

eBay argued that the brothers had violated their site-user agreement, giving them reason to unilaterally terminate the auction.

The company put forward a number of violations, such as that the shoes were used (which they were not), or inaccurately represented in pictures (which they were also not).

The Mofos were found to have not violated any rules of the site-user agreement, and now eBay has to pay up $86,700 in damages.

The contractual implications here are clear: be sure the contract you are making is compliant with legal statute. Or, at the very least, be aware that despite the provisions you put into your contract, they might not be enforceable in court. Enforceability of unilateral termination is contingent upon two subjective factors:

  • “A serious reason” being present
  • “Never [occurring] at an inopportune moment”

In a site-user agreement, a company provides users with the ability to use a service, and here it is to sell their wares. While users have the responsibility to use the service fairly, companies like eBay have the responsibility to provide a fair and good service. Here, it can be seen that the onus is on the company to be conscientious.

Better luck next time, eBay. Nothing can sour such sweet kicks.

To see standard terms of use and site-user agreements, visit our Small Business Law Library!

This article was co-authored by: Alina Butt

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

How do I make a “Terms and Conditions” user friendly while also protecting my legal rights?

Terms of Use. Terms of Service. Terms and Conditions. You’ve probably never paid much attention to them, despite them being on every website you visit online. The problem with Terms of Use (TOU) is that they are difficult to read and understand, and if you really want to use the site, you have to agree to them anyway.

But if you are the owner of the website, having the user bound by those terms and conditions is very important. How can you increase the odds that the user will be bound? One way is to try to draft them in simpler language. At the same time, it is important to make sure that legal rights are not lost in your effort to offer users a more readable TOU.

screen-shot-2016-10-09-at-1-13-32-pm

Source

Simplify the language

The Atlantic published an article on this very topic and used website 500px as a prime example. The website offers its legalese in a column on the left and a simplification in a column on the right, with the disclaimer that the latter column “is not legally binding.” This arrangement, while superficially elegant, does nothing to address the problem that exists regardless of form—the user lacks comprehension, be it of the meaning of the rigid legalese or the legal implications that are lost when the terms are oversimplified. So overly simple language is not a solution by itself.

Legalese is notoriously convoluted and long-winded, with sentences that trail off out of sight and out of mind. The syntax and grammar of the TOU should be overhauled to be clear and more concise, using the grammar of modern English.

Visual clues to meaning

A visual overhaul of TOU to include clear headers and less densely-packed text can make them more appealing to read. The user experience is all about quickness and a good interface, and so far most TOU’s are only good at being overwhelming and ugly.

Clickwrap or Browsewrap?

At the end of the day—and at the bottom of the TOU—user engagement and acknowledgement is paramount.

Composing a good TOU is just half the battle, because a user still has to opt-in, be it through an active action or a passive one. A distinction can be made between “clickwrap” TOU that engage users through a positive action (requiring they “Accept” the terms or not) and “browsewrap” TOU, which exist as a hyperlink on the page a user is visiting and is not required to be viewed.

browsewrap-vs-clickwrap-09

Source

Whether or not either of these avenues is legally binding can depend on what country you are in.

In the U.S. Ninth Circuit case Nguyen v. Barnes & Noble, Inc. (2014), the user sued the bookstore for deceptive online business practices. The bookstore argued that the user could not sue because of an arbitration clause in the site’s terms. The court decided that  “the user was successful in arguing that they weren’t subject to the terms of use of a website that had a browsewrap agreement.”

However, in the Canadian case of Century 21 Canada Limited Partnership v. Rogers Communications Inc. (2011) (BCSC), browsewrap TOU were found to be enforceable against users. While it appears that non-prompting TaC may be legally binding in Canada, the very recent decision in Nguyen v. Barnes & Noble, Inc. and the otherwise complete lack of case law on this specific matter, especially in Canada, should suggest that it’s better to be safe than sorry—so be sure to clickwrap your shiny, new, and user-friendly TOU.

In the end, using simpler words, clear grammar, good organization and a clickwrap TOU can go a long way to engaging the user and increasing the chances that they will be bound by the terms and conditions presented.

To see a standard set of terms and conditions, visit our Small Business Law Library!

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

Doubt on Acceptance of Terms of Use

Links from this article:
Read the article here.

Websites and internet service providers should consider inserting as many positive steps as possible to ensure that the user is aware it is bound by terms of use or terms of service to ensure the enforceability of those terms. This is something that can be addressed in the registration process.

A recent case in the US discussed the difference between “clickwrap” and “browsewrap” agreements. A clickwrap requires a positive action on the part of the user, but a browsewrap does not (usually just a link to the terms of service of the website).

In this case, the user was successful in arguing that they weren’t subject to the terms of use of a website that had a browsewrap agreement.

Read the article here.

 

Take away:

  • The drafter of a “browsewrap” terms of use (where only a link is provided to the terms of use) will wish to ensure that the user is completely aware that it exists, as it may be unenforceable if it is too hidden.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

When Drafting a Terms of Use: Identify All Actions that will Result in an Immediate Termination of the Terms

Links from this article:
Read the article here.

Drafters may want to insert prohibited actions that will result in automatic termination or restriction of service. Users may want to familiarize themselves with these provisions in order to avoid inadvertent termination.

Netflix is restricting their users from international content and, if they do not obey, they may immediately terminate the user’s account. This is an action they are taking to protect from internet piracy, particularly along borders. If the content is not licensed to be shown in that area then it will not appear on the list of shows.

Read the article here.

 

Take away:

  • Drafters of a terms of use may wish to identify certain actions that will result in an immediate termination of the terms, thereby protecting their service from potential illegal actions by their users.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

Legal Tips and Tricks: Website Terms of Use and Consumer Protection Law

When designing a website terms of use, lawyers, software developers or company marketing folks will often review the terms of use of their competitors and “borrow” the terms they like to design their own terms.   This practice may be dangerous in Ontario if the competitor’s terms of use are taken from a company that is subject to rules outside of Ontario, as the terms may not incorporate the Consumer Protection Act (“CPA”) rules that govern website terms of use (“Internet Agreements“).

Under the CPA and associated its regulations, consumers are protected against unfair unilateral amendments.

The CPA and its regulations limit the ability of suppliers to unilaterally revise Internet Agreements.

Suppliers may amend, renew or extend the term of the agreement by explicit agreement to proposal under the following circumstances:

a)     the supplier makes a proposal for amendment, renewal or extension;
b)     the supplier provides to the consumer an update of all information required by the CPA and the update reflects the effect of the proposal, amendment or renewal; and
c)     the consumer explicitly agrees to the proposal.

Suppliers may amend, renew or extend the term of the agreement in accordance with the Internet Agreement under the following circumstances:

a)      the agreement indicates what elements of the agreement the supplier may propose to amend, renew or extend and at what intervals the supplier may propose an amendment, renewal or extension;
b)      notice of amendment, renewal or extension is provided at least 30 but no more than 90 days in advance of the date that the amendment, renewal or extension takes effect;
c)      the consumer is given a copy of the amended agreement; and
d)      the supplier provides the consumer with at least two options: (i) to terminate the agreement, and (ii) to retain the existing agreement unchanged as an alternative to accepting the proposed amendment.

As you can see there are very strict rules on timing, and the original terms of use must include language allowing for amendment.

 Often a company will keep an Internet Agreements deliberately short in term so that the agreement can be terminated easily by the company if proposed new terms are rejected by the site user.

Make sure to keep in mind that this set of rules exist and make sure to discuss with your legal counsel these and other rules that will affect your site terms.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...

Legal Tips and Tricks: The Minimum Age for Your Web/Mobile App Subscribers

Links from this article:
here

Are the subscribers/customers of your web or mobile application under the age of majority?  This is potentially problematic for several reasons:

Companies with subscribers who are under the age of 13 will face additional scrutiny on the nature of advertising that they are exposed to.

You will note that Facebook requires that its subscribers are at minimum, 13 years of age.  Facebook admits that many users will lie about their age.  According to a Huffington Post article, Facebook deletes 20,000 underage users per day, and encourages self-reporting (or parent reporting) to assist them to find the underage users.  When registering on Facebook, subscribers are required to provide their date of birth, and Facebook offers the following disclaimer:

“Providing your birthday helps make sure you get the right Facebook experience for your age. You can choose to hide this info from your timeline later if you want.”

Contracts entered into with minors are not generally enforceable without a parent or legal guardian co-signing.

Even with a co-signing parent or guardian, there are certain rights that cannot be assigned by your legal guardian (e.g. limitation of liability).

When developing your terms of use to include an underage counterparty, to increase the likelihood of enforceability, here are some suggested terms:

1.  Require that the parent or legal guardian agree to be bound by the terms of use.

2.  Require that the parent or legal guardian provide their registration information.

3.  If payment is required, ensure that the credit card provided is that of a primary cardholder who is the age of majority, and is the parent or legal guardian.

4.  Terms that impose liability on the registrants should include both the parent or legal guardian and the subscriber, jointly, and in aggregate.

5.  Many electronic terms of use do not allow for a signature; you can require that a scanned copy of the contract be sent back after registration and also require that the parent or legal guardian provide their signature.

For additional reading:  see my recently posted commentary on this topic  here.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Read more...
Additional Rent Announcements API Approval of Terms Asset Purchase Agreement Background Intellectual Property Board of Directors Business Case Law CASL Clausehound Collaboration Commercial Lease Confidential Information Confidentiality Consulting Agreement Contract Drafting Contract Negotiations Corporation Costs and Expenses CPD Definition of Intellectual Property Dispute Resolution Distribution Agreement Employee Employment Employment Agreement ESOP Events Farming Law Generally Used Clauses Grant of Licence Handling of Confidential Information Indemnity Independent Contractor Independent Legal Advice Informal Discussions Intellectual Property Investor Journey Licence Restrictions Limitation of Liability Long Form Marriage Contract Master Services Agreement NDA Non-competition Not for Profit Articles of Incorporation Notice of Arbitration No Waiver Obligations Ownership of Intellectual Property Ownership of Work Product Parties Partnership Prenuptial Agreements Privacy Policy Product Sales Agreement Purpose Representations and Warranties Restrictive Covenants Safeguarding Requirements Settlement Agreement Shareholder Agreement Software Development Start-up Subscription Agreement Technology Termination Term Sheet Terms of Use Trademark Registration Transfer of Intellectual Property Waivers and Releases Website Terms of Use
Show All Tags