Two requirements to make online terms and conditions binding
Mark Pestronk is a Washington-based lawyer
specializing in travel law.
What exactly do we need to do to ensure
that the clients will be bound?
Q:Some of our leisure clients view spe- cial offers on our website and then call or email us for further informa-
tion. When our agents make the sale, we
they tell the clients to refer to the terms and
conditions on our website. Those terms
and conditions contain a comprehensive
disclaimer like the samples that you have
posted at www.pestronk.com/free.html.
Are these clients bound by our website’s
terms and conditions? If not, how are the
big online agencies such as Expedia able
to bind customers to those sellers’ terms?
A:These are extremely good questions, and as far as I can tell, there are no relevant statutes, regulations, legal
precedents or scholarly articles. Nevertheless, I will try to provide some guidance on
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this important subject.
You have identified an increasingly common method of sales that falls between
typical e-commerce on the one hand and
traditional, offline sales on the other hand.
Let us call these sales online-offline transactions, and let us reason from both online
and offline precedents.
To bind a client to your online terms
and conditions, you need to give the client
actual notice of the terms and conditions,
and you need to give the client opportunity
to read the terms and conditions before the
client is bound.
The actual notice requirement is satisfied
when your agents tell the client to refer to
the online terms and conditions. This can
be done orally or in an email.
You can also obviously satisfy the notice
requirement by publishing the terms and
conditions offline in a paper copy or by adding it to an emailed quotation or itinerary.
The requirement of an opportunity to
read the terms and conditions before being bound can be satisfied in one of two
ways: Either you can refer the client to the
terms and conditions before you close the
sale, which is a cumbersome method for an
offline sale, or you can close the sale first
and give the client the opportunity to read
the terms and conditions later, as long as
the client can cancel the sale and get a full
refund if he will not consent to the terms
I realize that some travel suppliers, especially cruise lines, require you to make a
nonrefundable deposit or even nonrefundable final payment before you ever see a
copy of the terms and conditions (or passenger ticket contract, as the lines call it). In
my view, such a course of dealing opens up
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You need to
that you have
given the client
the cruise line to claims that the passenger
is not bound by the line’s terms and conditions, and there is an excellent precedent to
support this view.
In addition to binding the client, you
need to do one more thing: obtain proof
that you have given the actual notice and
opportunity for the client to read the terms
and conditions before becoming bound.
Otherwise, the client may well deny that he
was given notice.
The online agencies obtain proof because, during the sales process, you have
to click on an “I Agree” button in order
to move forward with your purchase. The
agencies then record your personal information and your computer’s IP address to
prove that it was you who clicked “I Agree.”
In my next column, I will cover best practices for obtaining proof offline in online-offline sales.
To submit a question for Legal Briefs,
email Mark Pestronk at mark@pestronk