Callahan & Fusco Attorneys Mitchell Ayes and Dan Kaufman recently prevailed on a Motion for Summary Judgment filed on behalf of a big tech client who operates a large booking platform wherein users of the neutral platform can locate and identify prospective independent service providers and freely contract with one another for services.
In order to use the client’s platform, both service providers and those seeking services, alike, are required to agree to the client’s Terms of Service before being able to use the platform. The Terms of Service include, inter alia, an indemnification provision that required users to indemnify the client in the event of any injuries to third parties that may arise out of the performance of services.
In the immediate case, in connection with a particular booking for services via the client’s platform, a third-party was injured and ultimately sued the client for vicarious liability as to the service provider’s negligence and arguing the client negligently trained and supervised the service provider.
Callahan & Fusco filed a Motion for Summary judgment on behalf of the client arguing that the independent service provider was neither the client’s employee nor agent, and thus that no vicarious liability could reasonably be expected to be established at trial.
Additionally, it was argued that Co-Defendant user of the client’s platform had agreed to the client’s terms of service, and as such, Co-Defendant was required to indemnify the client.
The Massachusetts Norfolk Superior Court held that Co-Defendant possessed the requisite notice for non-negotiable contract formation based upon the conspicuous nature of the client’s Terms of Service —for example, that the terms were hyperlinked in blue font, and a user could not proceed to use Defendant’s application without first clicking a “sign in” or “sign up” button indicating the user agreed to the terms. The Court found that the Co-Defendant, by clicking one of these buttons reasonably manifested her assent to the client’s Terms of Service.
The Court further explained that even in the absence of Plaintiff’s actual review of all of Defendant’s Terms of Use, that a reasonable opportunity to review the terms would be sufficient to satisfy the notice requirement.
Based on its analysis, the Court ultimately held: (1) summary judgment was warranted as to Plaintiff’s vicarious liability claim because there was no employee/employer relationship between the client and service providers; and (2) summary judgment was warranted as to indemnity crossclaims asserted against Co-Defendant because there was formation of a nonnegotiable standard form contract, which required Co-Defendant to indemnify the client.
This decision highlights, inter alia, that users of a website or application ought to actually read all Terms of Service, as well as the need for creators of online services, products, or applications to ensure that terms of service are conspicuously displayed in order to create an enforceable, online/digital contract.