Publisher's Note: This column is for informational purposes only, and is not intended as legal advice. Readers should always consult their own attorneys before making legal decisions.
Does Your Web Site Need Visitor Contracts? Part 1
by Lance Rose, Esq., UniNews online Legal Affairs Correspondent
The answer to this question varies with the site. Some sites can benefit greatly from using visitor contracts, but others don't really need them. For instance, pure "publishing" sites, which simply present information without seeking any deals, information or money from web surfers who stop by, may have so little legal risk that a visitor contract would be overkill. In such cases, a few simple proprietary notices, warning notices and the like will do the trick.
For the many sites exploring different ways of doing business online, however, contracts with visitors can be essential. Various and very different goals can be achieved by using a visitor contract. We will discuss some of them briefly below.
1. Defining Visitors' Privacy Rights. Growing hordes of web site visitors are nervous about how their privacy is compromised on the web. Increasingly, commercial sites are targeting visitor information as a primary vehicle for making money, through use of that information to build ad revenues, sell mailing lists, and the like. Webmasters wishing to address these matters openly with visitors can use online contracts to great advantage.
Two major kinds of privacy can be covered in the contract. One is the privacy of information about a visitor's viewing or buying habits. The webmaster can inform visitors exactly what it will do with this information, and it can even offer them the ability to set their own desired privacy levels (such as whether their personal information can be given to other sites or business). Another kind of privacy right applies to e-mail, private chat or BBS areas, and the like. While federal laws give citizens some measure of online privacy protection, they leave open many uncertainties in the World Wide Web environment. For instance, it is not clear whether or not a webmaster has the right to review private visitor e-mail on the webmaster's own web site when that site: (a) is hosted on someone else's server, or (b) when it is a company site containing a mix of private in-house and public areas. Most such uncertainties can be easily remedied by a well-drafted visitor agreement covering these subjects.
2. Defining Webmaster/Visitor Property Rights. Property rights and laws online are changing, though not as quickly as the lawmakers would have us believe. However, even where online property rights are fairly predictable to attorneys experienced in such things, webmasters and site visitors can develop very different ideas of what can and can't be copied from the site. For these reasons, webmasters should consider using the visitor contract to describe exactly what aspects of the site they consider to be their property, and what uses they'll permit visitors to make of the property (beyond the standard implied permissions to view, download and print site materials for personal use). Where web sites request or accept any sort of materials from their visitors, they should also consider using the visitor contract to spell out their license (or ownership) and use rights to the uploaded materials.
3. Confidentiality and Security. When webmasters offer such things as privacy protection or secure business services to visitors, the law can step in to make them legally obligated to use good enough security and integrity protection on their sites to follow through on those offers. Webmasters can manage such obligations by including a provision that tells visitors exactly how much security they are entitled to rely upon, and excuses the webmaster when he makes honest mistakes that may compromise that security. Where a webmaster wants to avoid security obligations of any sort, he can get visitors to agree that they use site facilities at their own risk, and do not rely on any security provided by the webmaster. Webmasters can also use the contract to reduce site security risks posed by visitors themselves, such as requiring each visitor not to disclose or permit anyone else to use his or her unique account access i.d. or password.
4. Make Notices and Warnings More Effective. A properly set up web site will often have some notices to visitors on the home page and on several key internal pages, such as property rights notices, warnings of risky or dangerous materials or conditions, and reminders that visitors uploading materials must be sure they have upload rights, have checked software files for viruses, etc. The problem is that if a disagreement arises between webmaster and visitor concerning such matters, the visitor might say he didn't really see or understand the applicable notice. This is particularly likely where the site notices change from time to time, and the visitor is not fully alerted each time a change is made. The visitor contract can fix these problems by making visitors agree, up front, to all notices posted on the site, including any changes made to those notices from time to time by the webmaster. This way, the webmaster does not need to worry about whether visitors will see new changes to its online notices, because visitors will be responsible for complying with the notices at all times, and checking for any changes themselves.
5. Modifying Implied and Consumer Obligations. Webmasters can find themselves automatically subjected to certain implied legal obligations to users, especially where sales or other commercial activities are involved. For instance, under the nationwide Uniform Commercial Code, a seller of "goods" (which can include downloadable standard commercial software packages and other standard digital products) is deemed to make certain warranties of product fitness to buyers, unless those warranties are conspicuously disclaimed using "AS IS" or other specified contract language. There are also regulations such as the Federal Trade Commission's "mail order" rule, which regulates how sellers may handle delays in shipments to consumers. In this case, the visitor contract can be used to make buyers agree to certain FTC rule options which give sellers more flexibility to deal with delayed deliveries. Webmasters concerned about these and other implied obligations should discuss them with their lawyers, and determine in each case how the visitor contract might aid them in meeting or changing such obligations.
6. Visitor Indemnities. Web site visitors are capable of a wide variety of activities that might expose a webmaster to legal risks, such as: libel and defamation; uploading infringing or virus-ridden files; posting classified information; misusing trademarks; using the server as a vehicle to harass others or criminally intrude into other systems; and so on. This risk is greatest when visitors have the opportunity to contribute to the site, such as through uploads or participating in discussions, or they are given the ability to use the site or the underlying server to connect to other Internet sites. Webmasters can use an indemnity provision in the visitor agreement to discourage such activities.
People are sometimes confused by the word "indemnity", but the concept is actually very simple: when Person A indemnifies Person B, that means Person A will protect Person B from any injuries or losses due to problems caused by Person A, often including any lawsuits by outsiders against Person B. So by agreeing to the indemnity clause, visitors agree to protect the webmaster from lawsuits and the like arising from their activities at the site. Realistically, a lot of visitors don't have the money to fully indemnify a webmaster for a major lawsuit or financial injury. However, indemnity clauses remain a good deterrent against problematic visitor activities. At the very least, web users with a mind for mischief will seek to use sites that do not require an indemnity provision as the place from which to launch their troublesome activities at the world.
7. Limiting Liability. Webmasters need to deal with the possibility that their own visitors may sue them. This can be readily handled by standard contract provisions that put a cap on the total amount of money damages a visitor can seek against the webmaster in court. Webmasters may also seek to sharply limit liability for particular potential problem areas, such as transmission problems, accuracy of information, problems caused to visitors by other visitors, etc.
8. Whose Laws Apply? In most cases, people will visit a site from all over the country, if not the entire globe. The laws of visitors' various jurisdictions may be fairly similar on some subjects, but vary wildly in others. For instance, laws on consumer protection, local privacy rights, and confidential information can vary from state to state. Thus, webmasters who want to conform to the laws applicable to those who use their sites could find themselves faced with learning dozens of laws from dozens of jurisdictions, a task that would defy the top lawyers in the world, much less a legal layman just trying to run an online operation. Luckily, this is one matter that can be handily managed in the visitor agreement, by specifying that the law of only one place, namely the webmaster's own state and country, will apply to all matters between the webmaster and site visitors.
9. Where Will Disputes Be Resolved? In addition to choosing the legal standards that apply to the site, webmasters should also consider choosing where any lawsuits involving site visitors will take place. Without a contract, any site visitor can start up a lawsuit against a web site or webmaster anywhere in the country. The inconvenience and cost of dealing with out-of-state lawsuits can be enormous, and can give an unfair advantage to visitors from remote locales in resolving disagreements. Again, it is a simple matter to use the visitor agreement to specify the webmaster's own country and state, perhaps even a major city in which the webmaster resides, in which all legal proceedings with visitors must take place.
Webmasters may also want to specify that disagreements will not go straight to court, but to arbitration instead. There is some difference of opinion within the legal profession over how much money, if any, this really saves over a regular lawsuit, but arbitration provisions are still fairly popular, and standard ones can be easily obtained. If a webmaster truly wants to save money, and participate in an interesting part of the online legal revolution as well, he can even specify that disagreements with visitors must be arbitrated only in online dispute resolution forums, such as the one conducted by the American Arbitration Association with the Cyberspace Law Institute. An added benefit of such procedures is that they can be very practical for handling disagreements with visitors in other countries. We can dispense with worrying about whether the parties will be able to get together physically, and just get on with ending the dispute.
There are many other matters that can be covered in visitor agreements, such as payment terms for sites that charge access fees; defining access levels; and specifying the webmaster's rights to filter information, and delete or alter postings and other messages deemed inappropriate or illegal. Webmaster, site operators and others interested in putting together their own online agreements should consult with their attorneys about the best mix of provisions for their own sites.
Part 2, "Making the Contract Stick," will appear in the July issue of UniNews online.
Lance Rose (elrose@well.com), an attorney and writer currently practicing law in Scottsdale, AZ, has worked in the computer and information law fields for over 15 years. He is the author of NetLaw: Your Rights in the Online World (Osborne/McGraw-Hill), operates the NetLaw web site at http://www.netlaw.com, and has written extensively for print publications including Wired, Boardwatch Magazine, and Internet World.