EIFY: terms of use

Following on from this week’s earlier post about the copyright issues in the EIFY case, McDougall J also held the “clickwrap” agreement was enforceable, but the breach did not result in any compensable loss.

You will remember that EIFY and 3D Safety provide competing web-based induction services for the construction industry. The principals of 3D Safety had accessed EIFY’s site in the course of developing its websites for Mirvac and Thiess.

Before a browser could access the web-based induction services provided by EIFY, he or she had to check a box acknowledging that he or she had read and agreed to the terms and conditions of use. McDougall J found this sufficient to form an agreement.

The registration details a user was required to input included an ABN and at least one of the 3DSafety principals had entered in his company name as well.

The terms and conditions, however, followed the modern form of drafting, referring to “you” and “your”. At [324] – [325], McDougall J found that this gave rise to a binding contract only with the particular user and not his or her company:

324 The strong impression conveyed by the terms of use overall is that they are directed to regulating the basis on which each person who has access to the website exercises that access. The terms of use appear to distinguish between those who access the website (“you”) and those with whom EIFY “enters into agreements” (“Clients”).

325 In the absence of any express acknowledgment, either in the registration webpages or in the terms of use themselves, that an individual who registers and thereafter accesses the site accepts the terms of use not only in his or her own right but also on behalf of his or her employer, I think that Mr Andronos’ submission on this point is correct. By clicking to acknowledge their acceptance of the terms of use, Messrs Conacher and Morrow indicated that they personally accepted those terms. That must mean that they agreed to accept those terms of use as regulating their personal access to the website. It does not follow, and I do not find, that by doing so they agreed to bind Services or Systems to those terms of use.

326 In short, Messrs Conacher and Morrow were bound by the terms of use. [3D Safety was] not.

The terms of use included clause 5:

  1. Access and Interference
    You agree that you will not use any robot, spider, other automatic device, or manual process to monitor or copy our web pages or the content contained herein without our prior written permission. You agree that you will not use any device, software or routine to interfere or attempt to interfere with the proper working of our Site. You agree that you will not take any action that imposes an unreasonable or disproportionately large load on our infrastructure. Much of the information on our Site is updated on a real time basis and is proprietary or is licensed to e-Induct® by our Clients or third parties. You agree that you will not copy, reproduce, alter, modify, create derivative works, or publicly display any content from our Site without the prior written permission of e-Induct or of the party authorised to grant such permission.

McDougall J was rather critical of the drafting of this clause. Nonetheless, he was able to find that Conacher and Morrow (the principals of 3D Safety)[1] had accessed EIFY’s site and breached the terms. However, this did not help EIFY.

This was because McDougall J found that the only breach of the terms had been accessing confidential information. The confidential information was confidential to EIFY’s clients, not to EIFY. As a result, his Honour considered EIFY would not be able to establish any loss to be compensated through damages.

EIFY Systems Pty Ltd v 3D Safety Services Pty Ltd [2017] NSWSC 1310 (McDougall J)

  • By the time of the trial, Morrow had in fact ceased being a director and only held some shares.  ?