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Prepared By: Melissa C. Marsh, Los Angeles Business Attorney
Written: May 2000

On March 27, 2000, in Ticketmaster Corp. v. Tickets.com (U.S. District Court, C.D. Cal.), the court held that for a web site's terms and conditions to be binding, they must be at the very least prominently displayed. What does this mean? In short, a web site owner should ensure that a link to the Web site's "terms and conditions of use" are placed in a large font somewhere near the top of the web site's home page. As it still remains unclear whether the prominent display of the web site's terms and conditions of use will be sufficient to bind users to those terms, web site owners should also consider converting their terms and conditions of use into "click-through" agreements. Click-through agreements are online legally binding contracts that require the visitor, or customer, to mouse click an "I accept" button before information can be accessed or goods ordered. Why? The facts and ruling of the California court in the Ticketmaster Case provides one reason.

Facts.

Ticketmaster's web site, which offers tickets to various entertainment events, contains event pages providing details on individual events. Tickets.com, which operates a competing online ticket business, also provides information as to where its users can purchase tickets that Tickets.com does not sell. To provide this information, Tickets.com included deep links to Ticketmaster's event pages on Ticketmaster's web site. Ticketmaster sued Tickets.com, alleging that Tickets.com violated Ticketmaster's terms and conditions, which prohibited others from deep linking.

Ruling.

The California court dismissed Ticketmaster's claim after finding, among other things, that although Ticketmaster's web site contained a link to its terms and conditions at the bottom of its home page, a binding contract is not created simply by use of a web site. The court's reasoning focused on the way in which Ticketmaster's terms and conditions were displayed on the web site. The judge held that the terms and conditions of use, located at the bottom of the web site's home page and at no other place on the site, did not create a binding contract. The court further found that users were not required to assent to the terms (e.g. click an "I accept" button), or even read them. The judge, did however, leave open the possibility that Ticketmaster might be able to prove that Tickets.com knew, or should have known, about the terms and conditions of use, thus creating a binding contract.

Conclusion.

Ticketmaster has since placed the link to its terms and conditions on top of its home page, so that it will be the first thing users see when visiting the web site. It is unclear, however, if prominently displaying terms and conditions of use will be sufficient to bind users to those terms. To ensure your terms of use are enforceable, web site operators should consider converting their terms and conditions into "click-through" agreements. Click-through agreements are online legal terms requiring the clicking of an "I accept" button before information can be accessed or goods ordered. Essentially, with click-through agreements, the web site operator can prove the user accepted the agreement; otherwise, the user would not have been able to use the Web site to engage in any of these activities. >/p>

Non-clickable terms and conditions of use, however, still may still be useful to put users on notice of certain facts, such as the ownership of copyrights and trademarks; notices required to qualify for safe harbors under the Digital Millennium Copyright Act; references to data privacy policies; and notices that links are not endorsements of third parties or their products. The terms of a click-through agreement, however, are much more likely to be enforced to disclaim implied warranties, to limit direct damages, to exclude indirect damages, to choose a governing law, to require arbitration, to require a suit to be brought in a particular jurisdiction, or as in the Ticketmaster case, to limit the permitted uses of a web site.

For more information of what should be contained in your terms of use, or to have your terms of use reviewed or prepared, please feel free to schedule an appointment by calling 818-849-5206 or emailing us at MMarsh .

© 2000 Melissa C. Marsh. All Rights Reserved.