Thursday, July 26, 2007

9th Circuit and Contract Amendments

Eric Goldman's Technology and Marketing blog gives a good rundown of the 9th Circuit's decision in Douglas v. US District Court ex rel Talk America, in which the court rejects the practice whereby one party unilaterally updates contract terms without notice to the other party. This method of updating contract terms is particularly common in terms of use agreements for websites. Here's Myspace's version: may modify this Agreement from time to time and such modification shall be effective upon posting by on the MySpace Website. You agree to be bound to any changes to this Agreement when you use the MySpace Services after any such modification is posted. It is therefore important that you review this Agreement regularly to ensure you are updated as to any changes.

As Goldman notes, there are a few options available in lieu of such a provision: have all users re-execute the amended contract, affirmatively notify all users of the change (e.g., mass email), or don't make any unilateral changes at all. From both practical and legal standpoints, each of these have their drawbacks, and this latest decision doesn't do much to pave a better way.

Update: Uber-drafter Ken Adams has some comments as well.



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