Unilaterally Amending “Virtual Attachments”

In this post I discussed language to use when incorporating into a contract terms stated in an ancillary document—including a web page—that isn’t attached to the contract. I subsequently invented the term “virtual attachment” to describe any such ancillary document. (If you can think of a better term, I’d be delighted to hear it.)

One issue I didn’t discuss in my previous post is on what basis a contract party could unilaterally amend the terms of any virtual attachment. Whether one can unilaterally amend an online contract is an issue that Eric Goldman discusses in this post about Douglas v. U.S. District Court ex rel. Talk America, No. 06-75424 (9th Cir. July 18, 2007).

The plaintiff in this case, Douglas, initially used AOL’s telephone services. After AOL sold its telephony business to Talk America, Talk America posted revised terms (including additional charges and a new arbitration clause) to its website but apparently didn’t notify its customers. After becoming aware of the additional charges, Douglas filed a class-action lawsuit against Talk America.

The court held that Talk America could not enforce the arbitration clause. For our purposes, what’s relevant is that the court noted that (1) a party can’t unilaterally change the terms of a contract and (2) parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side.

The opinion doesn’t indicate whether the terms specified that they could be amended without the customer’s consent. Eric assumes that they did.

Like Eric, I’m not a fan of provisions that give a party the right to unilaterally amend the terms of a virtual attachment. Unfortunately, the alternatives aren’t ideal, as Eric points out.

But I can imagine circumstances where unilateral amendment would be benign—for example, if the virtual attachment contains only factual information, such as contact information.

UPDATE 1: The Consumer Law & Policy Blog has posted an item about this case. It notes that many companies try to get around any problems relating to lack of notice of changes by not only having customers consent in advance to any changes but also requiring them to agree that they will periodically review the company’s website for changes to the contract. It cites as an example of such a contract Network Solutions’ service agreement.

UPDATE 2: Compare the Douglas case with the Canadian case Kanitz v. Rogers Cable Inc., [2002] O.J. No. 665, in which the court held that a posting on a corporate website constitutes sufficient notice to bind customers to changes in their user agreements. The user agreement at issue in that case gave Rogers the right to unilaterally amend the user agreement and provided for customers to be notified by (among other mechanisms) having changes posted on Rogers’ website.

UPDATE 3: I suggest that when considering the issue of unilateral amendment you should also consider whether the consumer may terminate the agreement at any time without adverse consequences. If that’s the case, then the issue isn’t really unilateral amendment but rather whether the company is required to notify the consumer of any unilateral change.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

4 thoughts on “Unilaterally Amending “Virtual Attachments””

  1. Take a look at Sprint’s cellphone contract terms and conditions sometime. They frequently refer to documents “posted at http://www.sprint.com/ratesandconditions.” Unlike the agreements in dispute in this case, there isn’t even a reference to a particular URL. The kicker is that there service agreements typically refer to a number of these terms.

    The real kicker is that they’re also not easily found, subject to change, and old versions don’t seem to be retained for posterities sake. Baffling.

  2. Um, isn’t “www.sprint.com/ratesandconditions” a URL? Click it and you do get a page titled “Regulatory, Tariffs, Rates and Terms” which seems to include the referenced documents.

    It’s not unusual for old versions to not be kept where people can find them for posterity’s sake – they are often retained in the Legal Department or some other location, but the company doesn’t want users to be confused with multiple versions “live”. You can always try a wayback machine to find earlier ones – or do what I do, and archive copies, marked by date, on my computer for future reference.

  3. The point would be, that reference in the contract to specifically incorporated documents are merely to that URL, and not to the correct agreement. For example, find the document entitled “ELECTRONIC INVOICE REPORTING AND ANALYTICS PRODUCT ANNEX” at that URL, or, for that matter, any of the other ones linked that way in the general terms and conditions: http://www.sprint.com/business/resources/ratesandterms/Standard_Terms_and_Conditions_for_Communications_Services.pdf.

    I have no problem with archiving of contracts. Indeed, I think that’s a wise solution. However, that’s not what Sprint seems to do. Their method of incorporation by mere reference to a generic URL you loses reference to specific versions and I can’t seem to see where they post old versions. Can you?

    Also, the wayback machine is only so effective for determining which version of a contract is applicable at a particular time.

    And, as a real solution, I just searched for the terms, attached them directly to the executed document, removed the awkward reference, and fixed them in time and place.

  4. OK, Your original comment was not clear about the URLs. You want more specificity, and I agree that would be preferable overall. In fact, I wonder whether the lack of specificity could be an issue in a trial?

    As for having Sprint post past agreements, I don’t think that they have any obligation to do so. When my company supercedes a previous version of an agreement that we use in negotiations, we remove all past versions to ensure that only the current version of the agreement and the related T&Cs will be used. It’s much the same as having your bank send a flyer of new T&Cs or anything else. Why do you need the old agreement once the new one takes effect? If you as the consumer want to keep a copy, it’s your obligation to maintain your own archive. As a vendor, I would fear a risk of confusion if multiple versions were available for review by the public, since the public doesn’t always pay attention to which one is current and when another became obsolete.

    If you want to obtain Sprint’s older agreements, I suggest you contact them and ask for copies. Let us know their response.


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