Terms and Conditions
are Considered a Contract
In the case of Southwest
Airlines Co. v. BoardFirst, LLC, a Texas court held that a
user of a website was bound by the terms and conditions of that
website where the user has actual knowledge of such terms
The Plaintiffs, Southwest airlines
maintained a first come, first served, open seating policy, where
passengers are arranged in groups. The Defendant, Boardfirst.com
was an internet company that provided a service to Southwest customers
whereby for a fee, a passenger could check in early and BoardFirst
would attempt to get the passenger into the first boarding group.
Southwest filed suit against Boardfirst
alleging that BoardFirsts service was a violation of the
Southwest Web site's terms of service because the terms
of service stated that the user agreed that he/she shall not use
the Southwest site for any purpose other than personal, non-commercial
This case turned on two major points.
First, the court examined whether
the terms of service were a valid contract. The court held that
so long as the user has "actual or constructive knowledge"
of the terms and conditions of the user agreement, the terms
of service are a valid contract.
The court held that BoardFirst had actual knowledge of the
terms and conditions because they were clearly displayed
via a link on the Southwest homepage, hence creating
a binding contract between Southwest and BoardFirst.
Secondly, the court determined
that BoardFirst had violated the terms and conditions by using
the site for commercial purposes even though they were acting
as agents for Southwests customers. Therefore, the court
ordered a permanent injunction which would stop BoardFirst from
ever using Southwests website.
The court further stated that although it knew that the courts
order would cause the dissolution of BoardFirst as a company,
it was the only way to ensure that BoardFirst would stop its unauthorized
use of Southwests website.
The MP3 Backing Trax website is covered by Scottish law which
states that if you have a website, you must publish the terms
be accessible from the main homepage (please see http://www.mp3backingtrax.com/index.htm
side navidgation bar AND at the bottom of the page).
These terms protect the website owners interests, even if the
website owner has no futher interactions with the customer,
such as online trading, data collection or allowing publication
of notices (noticeboards).
The terms and conditions published on a website also apply to
websites hosted in England, Wales or Scotland.