Your Real Estate Website is Illegal

by Victor Lund on November 1, 2012

Lawsuit Image

It is November, that time of year when you need to schedule the update on your copyright to © 2013 before January 1st. But there is more that you should be considering, a revision to the way that you handle the terms of use.

Most real estate websites place their terms of use conspicuously down deep in the footer of their website, along with their privacy policy. This is the way that it has been done for years. However, a court case involving Amazon.com subsidiary, Zappos just changed all of that.

In the Zappos case, 24 million consumer email addresses where stolen by hackers. Zappos went to arbitration and settled the case. The judge in the case threw out the arbitrated settlement for two reasons.

  1. The Zappos terms of use indicate that they can change the agreement at any time. The judge ruled that this is inherently unfair, and previous courts have invalidated contracts on those grounds before.
  2. The consumer did not explicitly agree to the Privacy Policy or Terms of Use.

Go look at your website, and register. Is there a clickwrap? How about if the consumer fills out a form?

In truth, you should speak to your lawyer about what is best in your State to comply with State and Federal Laws. I know that Larson Sobodka LLC and Privacy Solutions both have deep experience in these areas of  law and they get real estate. If you contact the firm, start with Brian Larson at Larson Sobodka or Darity Wesley at Privacy Solutions. They may pass you along to one of their Associates in the firm – but do not worry about that. They have done this sort of work before and are saving you money by having a lower paid lawyer get you fixed up.

It should look like this (Image courtesy of RE Technology – Privacy Audit performed by Privacy Solutions)

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{ 3 comments… read them below or add one }

Michael Erdman November 1, 2012 at 10:36 am

Victor,

Very good of you to raise this issue with your readers. Even well capitalized e-commerce sites are not immune to not fully grasping the current application of contract law to the web – a similar decision recently went against Barnes & Noble. http://blog.ericgoldman.org/archives/2012/09/hp_touchpad_pur.htm

Sites that merely include a terms of use (TOU) hyperlink at the bottom of the page are on very thin ice. A reviewing court may ask whether users had constructive notice of the TOU and thus agreed to be bound by them. Typically the best bet is to prominently advise users that the TOU govern use of the site, encourage them to review same (provide a link), and state that by proceeding (clicking), they acknowledge they have reviewed the TOU and agree to be bound by same.

Michael

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Victor Lund November 1, 2012 at 2:02 pm

Hey Michael – great comment. I am a huge fan of your blog – – but you stopped blogging. Fire up your engines in 2013!

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Toby Barnett November 2, 2012 at 11:01 am

Most real estate brokers don’t have a back ground in law as knowing all the correct ways, or having the coding skills, to deploy a ToS. As a geeky person, I myself find it is challenging to manage it all and make sure all the basis are covered while maintaining a sales career and doing all my own website work. Also, most real estate brokers don’t even know how to login into their website and make those minor of changes.

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