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.

 

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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.

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