A recent decision of the Supreme Court of British Columbia found that visitors to publicly available websites can be bound by its terms and conditions, even where users did not explicitly accept them. The decision has broad implications, particularly for automated website indexing.
Background to the Dispute
Century 21 Canada Limited Partnership (Century 21 Canada) developed and operates a publically accessible website (Century 21 website) designed to promote its business to potential users by featuring property listings belonging to Century 21 brokers and agents from British Columbia and across Canada.
Zoocasa Inc. (Zoocasa) operated a website that collated property listings from various real estate websites using automated software programs. It provided users with relevant results in response to their search queries (such as location, price and number of bedrooms), including photographs of properties offered for sale, property descriptions and other property details on the Century 21 website.
Century 21 Canada informed Zoocasa that they did not consent to their activities in indexing and copying material from their website. It then placed Terms of Use on their website home page, forbidding the copying or reuse of its property listings. The Terms of Use were at the bottom of the home page and were not drawn to the attention of users in any active way. The Terms stated that 'by accessing or using the Website You agree to be bound by these Terms of Use without limitation or qualification'. The website did not require users to acknowledge reading and agreeing to them. Century 21 Canada also immediately notified Zoocasa of the existence of the Terms of Use and that they considered Zoocasa to be in breach of those Terms and infringing Century 21 Canada's copyright.
Zoocasa continued to access Century 21 Canada's website to index and copy material without consent. As a result, Century 21 Canada commenced proceedings seeking an injunction and damages for Zoocasa's conduct. The issue for the Court was whether Zoocasa's acts in accessing the Century 21 website were sufficient to result in the formation of an agreement.
Contract claims
Zoocasa argued that there was no valid offer, acceptance or consideration for the creation of a contract, particularly as users did not have to expressly agree to anything and the website was freely available for anyone to access. Zoocasa also argued that, as a matter of public policy, it would be detrimental to the operation of the Internet if merely accessing a website that contained terms and conditions would serve as acceptance sufficient to form a binding contract, where the user did not expressly agree to such acceptance.
Punnett J was unconvinced by this argument. In its view, not all information on the web is available without restrictions and contract law is available to protect such restricted information. The Court considered how the law has adapted to changing methods of contracting through the recognised 'ticket' cases, such as buying a car park or concert ticket, where a machine is involved in the contractual process. In these cases, the machine is the mechanism by which the customer enters into a contract upon the receipt of a ticket. Applying these principles, Punnett J found that a publicly available website does not necessarily give a right of access free of any contractual terms.
The Court found that the user's act of accessing the website beyond the initial screen page constituted agreement to the contractual terms of the website. As a result, Zoocasa had agreed, simply by accessing Century 21's website, to observe Century 21's Terms of Use. In making this finding, the Court noted that the type of user of the site will be taken into account in determining whether a valid contract exists. For example, whether the user is (i) an individual consumer or a commercial entity or (ii) a one-time user or a frequent user.
The Court concluded that Zoocasa breached the contract with Century 21 Canada. Interestingly, the Court only awarded $1,000 in damages, stating that Zoocasa's conduct was not 'particularly egregious'.
Copyright infringement claims
There was also claims for copyright infringement made on behalf of Century 21 Canada and two real estate salespersons who were the authors of the sales listings. They argued that the photographs and property descriptions (the Works) created for its online property listings were protected by copyright and Zoocasa infringed that copyright by indexing and copying them on the Zoocasa website. Punnett J found that the Works were entitled to copyright protection due to the level of skill and judgment required to produce them. Punnett J held that Zoocasa had copied a substantial part of the property descriptions and the entire photographs and as such, Zoocasa had infringed copyright.
The Court granted Century 21 Canada a permanent injunction, restraining Zoocasa from accessing the Century 21 website in contravention of the Terms of Use posted on that website.
Implications of the decision
The critical consideration as to whether the sort of agreement at issue in this case (often referred to as 'browse wrap' agreements) is enforceable is whether the user is aware of the terms and conditions. If so, then the browse wrap agreement could be binding and enforceable. Importantly, there is no need for the user to take steps to indicate his or her acceptance of the terms eg. by ticking 'I agree'. Whether or not the user can be taken to have accepted the terms in such circumstances will depend on factors such as:
(i) what notice the user has respecting what they are agreeing to, including the prominence the site gives to the terms and conditions
(ii) whether the user is an individual consumer or a commercial entity and in addition a one-time user or a frequent user of the site.
As the Judge stated, '[a]t the root of this lawsuit is the legitimacy of indexing publically available websites'. A website operator seeking to prevent a competitor from scraping its site can potentially use contractual terms to do so.
Partner: John Fairbairn
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