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Attorney Fee-Shifting Provision Not Binding

Writer's picture: Paul Peter Nicolai Paul Peter Nicolai

An online fee-shifting provision referenced by a hyperlink in a contract was not enforced since the contract did not communicate that the fee-shifting provision was meant to be incorporated into the contract by reference. The warranty section at the very end of the contract featured two bullet points. The second included a website link with a complete list of terms and conditions and warranty details. Among the terms and conditions in that link was a provision authorizing an award of fees in favor of a prevailing party in litigation or arbitration concerning the contract. The court said the form contract did not communicate that those terms and conditions would bind both parties. Instead, this statement was susceptible to other interpretations.


WHY THIS IS IMPORTANT… both state and federal courts in New England have been straightforward: for terms to be incorporated into an online contract, those terms need to be clearly explained. In this case, the reference to the language was not apparent, and the language on a separate page would be incorporated into the contract. As a result, it didn't apply.

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