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Why reading a website’s fine print matters Add to ...

Click, you’ve just opened a Web page. And according to a recent B.C. Supreme Court decision, you’ve also just signed a contract.

In a ruling observers say has important implications for online commerce, a B.C. judge has sided with Century 21 Canada in its fight with Zoocasa, a website owned by Rogers Communications Inc., over the unauthorized use or “scraping” of online real estate listings.

In the decision, released earlier this month, Mr. Justice Robert Punnett issued an injunction banning Zoocasa from using photos and descriptions of houses for sale from Century 21’s online listings and posting them on Zoocasa’s website, where it added other information about the neighbourhood or nearby schools or stores.

Judge Punnett declared that Zoocasa, simply by accessing Century 21’s website, had agreed to observe Century 21’s “terms of use,” fine print that forbids the copying or reuse of its real estate listings.

The judge only awarded $1,000 in punitive damages, saying that Zoocasa’s conduct was not “particularly egregious.” Still, experts say the judgment settles the question of whether a website’s fine print can be enforced, even if users are not asked to explicitly accept the terms by clicking on something.

The ruling is being hailed as an important recognition that companies must be able to control the way information they put online is used.

“They were taking data and putting in on their site, even though we have rules on our site … the same as Rogers has on their site,” said Don Lawby, president of Century 21 Canada. “We have a responsibility to protect that data.”

A Rogers spokeswoman, Patricia Trott, said the company is still reviewing the decision. But she added that last year, Zoocasa stopped using data from Century 21’s site and “has operated since then in full compliance with the various real estate boards across Canada.”

The judgment in the case brings an old concept in the law into the Internet age, said Marko Vesely, a partner with Lawson Lundell LLP in Vancouver who represented Century 21.

The idea that someone can agree to the terms of a contract simply by acting – such as by purchasing a concert ticket, using a parking garage or getting on a bus – is not new, Mr. Vesely said: “It’s the application of that rather established concept to this new setting, and obviously an important part of our lives now, the Internet.”

Century 21’s battle with Zoocasa goes right back to the website’s launch in August, 2008, when Rogers representatives pitched the idea to Century 21 in hopes the real estate giant would give Zoocasa access to online house listings. Century 21 refused to play ball. But according to the judgment, Zoocasa went ahead and started taking listings from Century 21’s website anyway, despite warnings from Century 21’s lawyers.

By November of 2008, Zoocasa had started posting only “truncated” listings. Century 21 filed its lawsuit a month later, alleging that Zoocasa had violated the Century 21 website’s terms of use, and copyright laws. It wasn’t until March, 2010, that Zoocasa stopped using the Century 21 site’s listings, except in cases where it had permission from individual real estate agents.

The question was whether by merely using Century 21’s website, did Zoocasa enter into – and then break – a legal contract. The legal precedents that participants can enter into a contact through actions, not just a signature or handshake, date back to what are known as the “ticket cases” from 18th century England, Judge Punnett writes. The rise of public transportation prompted courts to recognize the terms printed on the backs of tickets as legally binding.

But the judge acknowledges there have been very few Canadian cases on electronic contracts. (The issue of evolving technology and contracts arose in a Canadian case in 1987, in a dispute that involved the use of a fax machine.) In the 1980s and 1990s, Canadian and U.S. courts started grappling with what were known as “shrink wrap” agreements, meant to bind consumers buying a piece of software to an agreement once they removed the shrink wrap.

As more software was downloaded instead of grabbed off a shelf, the concept of the so-called “click wrap” evolved, in which users are asked to read a fine print agreement on the Web and click that they accept the terms.

The Century 21 case deals with the latest iteration, known as “browse wrap,” a concept that holds that users signal their consent merely by continuing to browse a website, after being somehow given notice of the site’s terms of use. The user does not have to click on an “I agree” button. A handful of Canadian decisions, and more in the United States, have started recognizing these “browse wrap” agreements.

Rogers and Zoocasa argued in court that recognizing “browse wrap” terms as binding would have a “chilling effect” on the open nature of the development of the Internet. They compared the browsing of a website to merely glancing at a billboard on the highway – an act that clearly does not imply a signed contract.

Judge Punnett dismissed these arguments, saying that if businesses are denied control of the information they post on the websites they may be less inclined to use the Internet. “It is important for commercial efficacy that contract terms can be agreed upon as easily in the electronic world as in the world of paper,” the judge wrote.

Arshia Tabrizi, a Toronto technology lawyer, said that while the judgment leaves open what constitutes proper notice of a terms-of-use agreement, it clears up any questions about whether browse wrap contracts can be enforced.

“So long as you have notice, just by browsing the site, you’re implicitly accepting the agreement, so there’s a contract formed,” Mr. Tabrizi said.

The Web is crawling with sites similar to Zoocasa, which take data from multiple websites – such as car rental or hotel sites – and make them more easily searchable and comparable. But the Century 21 decision says companies in this business cannot use data over the objections of the owners of information, said Barry Sookman, a partner with McCarthy Tétrault LLP who blogs on technology and intellectual property law.

If the ruling, which lines up with similar U.S. decisions, had gone the other way, many websites might have had to impose “click wrap” windows for Canadian users only, Mr. Sookman said.

And companies would rather avoid this, he said, because it turns off consumers: “Basically people don’t want to have users click on things and read all that fine print.”

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