Online Terms & Conditions – are they binding?

The majority of us I'm sure (even us lawyers) have had those transactions where we have purchased something online, both in our personal and professional lives, and we tick the box stating 'I have read the terms and conditions'. How many of us do read those terms and conditions though, and does failing to read them mean we are not bound?

In the recent case of Blu-Sky Solutions Ltd v Be Caring Ltd, the High Court considered this issue. Be Caring entered into a contract with Blu-Sky for the provision of mobile services and in doing so, signed the purchase order via an e-signing system confirming that it had logged onto Blu-Sky's systems and had read, agreed and fully understood all the terms and conditions.

In fact, Be Caring hadn't read the T&Cs as they thought they were signing heads of terms, not an immediately binding agreement.

Those T&Cs happened to include a clause stating that in the event of early cancellation, Be Caring would pay an administrative charge of £225 per connection – totalling a sum, in this instance, of £180,000.

The inevitable happened and the Court was left to decide whether the administrative charge was payable. Be Caring argued that the T&Cs were not incorporated into the contact and in any event challenged the onerous nature of the charge.


The Judge found in favour of Be Caring and agreed that the administrative charge clause was not incorporated into the contract because it was unduly onerous and was not reasonably drawn to Be Caring's attention. In addition, even had the clause been incorporated into the contact, it would have been void as it was a penal clause. 

Lessons to be learnt

In this case, the Judge was quite critical of the T&Cs pointing out that they were "not in a way user-friendly to any reader, let alone a non-legal reader". More importantly, when looking at the clause containing the administrative charge, the Judge stated that "the offending clause itself…was cunningly concealed in the middle of a dense thicket which none but the most dedicated could have been expected to discover and extricate". If this isn't red pen over your work then I'm not sure what is!

Although the Judge was critical of the T&Cs, he was quick to point out that the T&Cs in general were incorporated into the contract (save for the penalty clause!). They were reasonably and clearly brought to Be Caring's attention and could have been accessed and read by Be Caring had it followed the instructions provided by Blu-Sky on the purchase order.

There are lessons to be learnt for both sides here:

  • Don't try and hide clauses within your T&Cs – leave the "dense thicket" at home;
  • If your contract does include potentially onerous clauses make sure you bring them expressly to the attention of the other party;
  • If you are the one signing the contract and you have ticked a box that says you have read, understood and agree to the T&Cs – make sure you have because they are likely to be incorporated into the contract.

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