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High Court upholds Ryanair’s website terms of use in “Screen-Scraping” case

DATE: 24.06.2011

 

Introduction

In an Irish High Court judgment delivered on 26 February 2010, Mr Justice Michael Hanna ruled that Ryanair’s online “Terms of Use”, and in particular, the exclusive jurisdiction clause contained therein (which provided that the courts of the Republic of Ireland would have exclusive jurisdiction in respect of any dispute) were binding, and constituted an “agreement” for the purposes of Article 23 of the Brussels Regulation.

The decision is particularly important as it is one of the rare instances (indeed possibly the first) where an Irish court has had to rule on the issue of the legal enforceability of website terms of use. It needs to be noted that the ruling was in the context of a business to business (B2B) scenario rather than a business to consumer (B2C) scenario.

Background

Ryanair had commenced proceedings against Billigfluege.de GmbH in the Irish High Court claiming that their price comparison activities breached the Ryanair website’s Terms of Use, and Ryanair’s trademarks, copyrights and database rights. This is just one of a number of so-called “screen-scraping” actions that have been taken by Ryanair.

The Ryanair website Terms of Use provide that it is a condition precedent to the use of the Ryanair website that the party using the website submits to the sole and exclusive jurisdiction of the courts of the Republic of Ireland. Article 23 of the Brussels Regulation provides that “if the parties, one or more of whom is domiciled in a Member State have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.”

The defendant argued that there was no legally enforceable contract in place between the parties as the Ryanair “Terms of Use” lacked contractual effect because they were never agreed or consented to by the defendant. Accordingly, it claimed that Ryanair could not rely on Article 23 to confer jurisdiction on the Irish High Court because of the absence of an agreement.

The Decision

The judge looked at current Irish and European case law on the application of Article 23 of the Brussels Regulation, and in particular the requirement for there to be a legal agreement. As there is a dearth of case law in Ireland on the issue of exclusive jurisdiction clauses in website terms of use or terms and conditions, the High Court also looked at a number of US court cases. The judge made a number of important findings.

The defendant argued that Ryanair’s Terms of Use lacked contractual force because they were “nothing more than a set of unilaterally imposed conditions which they never agreed to.” This argument was rejected. The judge said that “it will often be the case that one party will set out certain terms, such as not using information on a website for commercial purposes without the owner’s consent, and if another party wishes to flout those terms, they cannot then say that because the term was unilaterally imposed, it had no legal effect.”

The defendant claimed that it never consented to the Terms of Use or entered into any agreement with the plaintiff. While the judge accepted that it was a well established general principle of law that parties to a contract cannot be bound by terms which they have not had an opportunity of reading prior to making the contract, the judge made the point that this was not to say that a party will not be bound because they have not read the terms – they will only escape being bound if they can show they were not afforded a reasonable opportunity to read the term in question before entering into the contract.

The judge noted that the exclusive jurisdiction clause was contained in the “Terms of Use” on the Ryanair website which in turn was highlighted by way of a hyperlink. In such circumstances, the “Terms of Use” were “fairly brought to the attention of the other party”. He found that they were clearly accessible by way of a hyperlink which was at all times clearly visible to the users of the Ryanair website. They were not hidden in an “awkward” part of the screen or in any way “concealed or difficult to find”. The judge commented that “the inclusion by Ryanair of their website Terms of Use via a hyperlink that the website user is required to view and assent to, results in the user entering into what is known as a “click-wrap agreement” with Ryanair.”

In addition to claiming that the Terms of Use lacked contractual effect, the defendant also argued that regardless of the validity of the terms, the defendant did not “use” the Ryanair website, but rather the customer did. The judge found that while the defendant may not be the actual customer or person who will sit on the seat in the plane, it was nevertheless a commercial entity, who nonetheless engaged with the Ryanair website for the purposes of gleaning or “scraping” information from it for onward transmission to its own customers. To claim that that activity is not “use” was an “exercise in semantics and an unconvincing argument.”

In resolving the issue of the validity of the Ryanair Terms of Use, the court also had to have regard to the traditional contract principles of offer, acceptance and consideration, consideration being a pre-requisite for a valid contract under Irish law. What was the consideration provided in this case? The defendant claimed there was no consideration. The judge found that Ryanair, through their website, offer information for use, subject at all times to their “Terms of Use” policy, to the users of the website, including the defendant. He was of the view that the defendant accepted the offer of information made by Ryanair when it systematically accessed the Ryanair website through the screen-scraping mechanism, and that the provision of information as to flights and prices of flights by Ryanair on their site, subject at all times to their “Terms and Conditions”, constituted a sufficient act of consideration for the purpose of making the contract legally binding.

For these reasons the judge ruled in favour of Ryanair. He held that there was a legally binding contract in existence; that consequently the exclusive jurisdiction clause was binding, and that the defendant had demonstrated sufficient assent to jurisdiction for the purposes of the Brussels Regulation.

Conclusion

There are many legal models that website operators can adopt for the purposes of incorporating their “terms of use” or other legal terms and conditions into their dealings with users. They range from online contracting models that require users to scroll through the legal text of the terms and conditions and then click an “I accept” or “I agree” button before they can proceed further, to online contracting models similar to the one used by Ryanair, where the “Terms of Use” are highlighted by way of a hyperlink and accessible through that link. This ruling will be of some comfort to the many website operators that deploy similar online contracting models, as it establishes that in the circumstances of the Ryanair case at least (noting that this was a B2B rather than a B2C scenario), such models are legally effective. It also means that users of websites will need to be on their guard in their dealings with websites, and may need to go to the trouble of actually reviewing the terms of use before proceeding further.

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