The right to amend online contracts

Managing online contracts can be challenging. Circumstances change, technologies change, and business methods change. As a result, service providers, sellers and distributors of products find it beneficial to include a provision in an online contract that allows for changes to the contract. However, unlike the traditional paper contract which require amendments to be in writing and signed, there are significant benefits to online providers to be able to make changes unilaterally.

Unfortunately, including a clause in an online contract that allows the online provider to make changes to the contract unilaterally, and in the sole discretion of the online provider, can be problematic. In a case decided on April 15, 2009 in the United States District Court for the Northern District of Texas, Harris v. Blockbuster, the court found that an online contract that allowed one party to unilaterally change any part of the contract at any time was not supported by consideration, and therefore was illusory and unenforceable.

When providing online contracts, if the online provider wants to be able to make changes without having to have the express consent of each potential user of the website, at a minimum, the contract should provide that no amendment to the contract will be enforceable until the passage of a reasonable time after the notice of the change is posted and the amendment should not be applicable to certain provisions of the contract, such as an arbitration clause, until the user has had an opportunity to exercise its rights under that provision prior to the amendment.