INTRODUCTION
This blog carefully examines the online consumer exploitation caused by a lack to provide notice of the conditions of the contract. Due to the widespread usage of the internet in daily life, the concept of notice is obsolete. Instead of being presented with a stack of documents to sign in the past, a consumer now merely needs to click a button to accept such terms. Due to the fact that for many people reading hundreds of pages of terms has become a mindless activity, businesses have designed increasingly exploitative terms for consumers to adhere to. Even though the consumer frequently has no idea what he or she is signing, the terms of the contract are nevertheless enforceable due to the expansive legal fiction of constructive notice.
Companies can link to their terms of service, where predatory terms can be hidden, using constructive notice[1]. Additionally, the consumer frequently only knows that terms are in place rather than actually knowing what they say. This goes against mutual assent, a crucial component of contract creation. Constructive notice[2], while potentially predatory, is important to maintain contracting certainty. Consumers are not reading their contracts, so they are oblivious to the terms of their agreements, and businesses need to be aware that their contracts are enforceable. The court system strongly supports businesses, which results in a deterioration of consumer rights. The legal system of today encourages consumer exploitation in order to promote certainty. In the absence of fraud or deception, common law courts have viewed online contracts as if they were paper contracts[3] and have held parties to online conditions whether they have read them or not. [4] Online contracts differ from paper contracts in three ways: they are standard form; they are provided by a computer, which makes negotiation impossible; and the machine is an interactive riot of sounds, colours, and pop-up advertisements that diverts customers’ attention away from the terms.
DOCTRINE OF UNCONSCIONABILITY AND THE REQUIREMENT OF NOTICE
Online contracts aren’t always unethical, according to the general consensus. However, the distinctive features of internet contracts make them seem impermissible. With regard to contractual relationships between parties, the court may intervene and change such agreements under the doctrine of unconscionability[5]. Contract clauses that unfairly oppress customers can be successfully defended against under the unconscionability theory. [6]
In Specht v. Netscape[7], the requirement for reasonable notice of terms in demonstrating assent is explored in great depth. In the period of paper contracts, the party implementing the agreement may easily show that the other party had fair notice of the conditions. Normally, the terms would be put into effect if the party seeking their enforcement could prove that the person who would be charged had agreed to or signed a document containing the in-question terms. However, as the world enters the digital age, more and more contracts are being issued online.
In Specht[8], the plaintiffs were presented with two digital contracts. The first contract was a set of license terms for “Netscape Communicator” and “Netscape Navigator.” The second was a list of “Smart Download Communicator” license terms. The initial set of conditions was laid out as a click-wrap contract. In order to continue with the download, the plaintiffs had to click “Yes” in a scrollable textbox. When the first set of terms was acknowledged, a webpage encouraging litigants to “Download with Confidence Using Smart Download!” was displayed. A new set of terms for Smart Download Communicator did not emerge until after scrolling down the page and below the Smart Download “download” button. According to the majority, the second license agreement was void since the plaintiffs were not made aware of it. Despite the availability of the doctrine of unconscionability and the requirement as to notice of terms of the contract, online vendors are able to exploit and induce unwary and unsophisticated customers.
PROPOSED SOLUTIONS
The victims of exploitation suffer losses. In order to stop this, the following alternatives are suggested. Consumers have a right to reasonable, prominent notice of the terms of the contracts they sign, hence businesses should be required to include summary pages as an attachment to the front of their contracts. They should also be kept quite short, given the length of the contract and the complexity of the agreement. The most important terms must appear first.
Here, a two-step strategy is recommended. The first step is to implement a strategy that lessens the burden of constructive notice by giving the client a summary of the agreement’s terms that is simple for them to read and understand while still allowing the client’s company to retain the full text of the contract on file in the event of a legal dispute. The purpose of this clause summary is not to replace the real contract. Its objective is to make consumers more aware of how the agreement might affect their legal rights and give them the choice to pursue the issue further if they come across a clause that might adversely affect those rights.
The second step is to encourage the client to read this brief, up-to-date summary of how his or her rights might be affected. Although it is difficult to force the customer to read the summary, making it so they must scroll through both it and the contract independently in order to indicate their agreement with the contract would help them comprehend the crucial details of the offer. If the firm fails to structure the contract in compliance with these rules, the contract must be deemed unenforceable to protect customers. Combining these two processes would encourage businesses to employ more consumer-friendly contracts by bringing constructive notice closer to actual notice.
CONCLUSION
The proposed solutions in the above head would help consumers gain from being able to grasp the terms of their agreements, whilst businesses would gain from the development of consumer loyalty and trust. Customers might end up being more willing to pay more for particular products backed by an open corporation as a result. Reform would also lessen legal disputes between businesses and customers who assert they were not given notice. If businesses started using summary pages, any claim that the customer was unaware of the terms of the contract would be quickly rejected or lost on summary judgment, lowering long-term legal expenses for businesses. Contracts are necessary for the smooth operation of businesses; this is not a plea for making it easy to break a contract that would otherwise be enforceable, but reform is necessary to bring back consumer justice in the age of digital contracts. The consumer is currently unduly burdened by the overbroad scope of the obligation of constructive notice under contract law. As a result, the doctrine of notice[9] as it currently stands is unjustified and has to be amended to better serve customers.
Author(s) Name: Shreya Mittal (National Law Institute University, Bhopal)
References:
[1] Meghna Gupta, ‘Doctrine of Constructive Notice’ (Legal Service India) <https://www.legalserviceindia.com/legal/article-978-doctrine-of-constructive-notice.html> accessed 25th November 2022
[2] Ibid
[3] eBay International AG v Creative Festival Entertainment Pty Limited (2006) 170 FCR 450
[4] Barnett v Network Solutions 38 SW 3d 200
[5] Nivedita Arora, ‘Contract Unconscionability in India’ (IPleaders, 30th October 2017) <https://blog.ipleaders.in/unconscionability-a-ground-for-avoiding-agreements/#:~:text=The%20doctrine%20of%20unconscionability%20allows,contract%20terms%20and%20deficient%20bargaining> accessed 25th November 2022
[6] Ibid
[7] Specht v Netscape Commc’ns Corp. 306 F.3d 17 (2d Cir. 2002)
[8] Ibid
[9] Tanvi G, ‘Doctrine of Notice’ (Legalraj, 22 May 2020) <https://legalraj.com/articles-details/doctrine-of-notice> accessed 25th November 2022
