I’ve covered the general rules for creating binding contracts over the Internet, particularly when Terms of Service are involved, on my blog. A new story has popped up which involves tech giant Apple seemingly attempting to rewrite the basic rules of contract law to populate their new news app.
The BBC is reporting that a number of publications have received an email from Apple regarding the news app that will debut in iOS 9 later in the year. This email, according to the reports, includes various terms under which Apple would repurpose the publications’ news content. The publications aren’t happy about it, though.
One of the terms that is causing consternation is an indemnity clause. This requires the publications to defend Apple and hold them harmless in the event of legal action against the publisher in cases where Apple is also named in the lawsuit.
An opt-out system
The email also instructs readers that they must explicitly opt out of the program if they don’t wish to be bound by the terms. That’s an interesting way to go about things. Here’s why.
Basic contract law requires three things for a contract to be valid: an offer, acceptance of that offer, and consideration.
The offer is obvious – it is the proposed contract sent by Apple. Consideration is value that is exchanged by both sides. Here, Apple is getting content to populate their app and the publications are getting a new audience for their content.
However, there must be some affirmative acceptance of an offer. The general rule is that silence does not constitute acceptance. There are a few exceptions to this, including:
When the party has made it clear that their silence would constitute acceptance (probably not the case here);
When the party intends for their silence to constitute acceptance (also probably not the case, except in specific circumstances); and
When the circumstances make it clear to the offeror that silence would constitute acceptance (also probably not the case here).
Without a reply from the publication accepting those terms, it is hard to imagine how Apple could think that this would be binding.
As a takeaway from this story, there are a few best practices that should be kept in mind when attempting to create a binding contract over the Internet:
The contract should be clear and conspicuous;
The user should show their acceptance through an affirmative act, such as clicking a button that says “I Accept,” checking a box or having to scroll down the entire agreement;
Opt-out situations should generally be avoided, though some situations (such as a passive website) may have more difficulty getting affirmative acceptance from the user.
For more assistance with setting up your website or mobile app to be legally-compliant, why not contact a lawyer? Also, you can get more information about these and other legal issues faced by game developers by grabbing my two free eBooks. Lastly, I’m building a site to ease the financial pain of getting game development contracts – check out the page and sign up to find out when it launches!