Managing Hyperlinked Contract Terms

Many technology-related service agreements between providers and their customers now include terms beyond the four corners of the document. Specifically, certain contract terms are incorporated as mere hyperlinks to a URL where the provider’s standard terms and provisions are maintained.

Although this approach is intended streamline the customer agreement, it also can present challenges to the customer. For example, what happens if/when the provider hosting the URL decides to update its terms? Who is responsible for informing the customer who entered into the agreement with that embedded hyperlink? Any agreement which purports to bind the parties to hyperlinked contract terms maintained at a URL can present significant business risk or process challenges.

When our clients have been faced with this situation, we have recommended the following options:

1. Include a provision that obligates the party in control of the URL to advise the parties of any changes, and further, require any “material” changes to be subject to the prior written approval of the parties. This strategy eliminates the necessity to routinely scan the URL’s content for relevant changes.
   
   
2. Take a screenshot of the hyperlinked contract terms (usually a simple cut and paste exercise) and attach it as an exhibit. By capturing the terms as an exhibit, the parties can negotiate at one point in time all the relevant issues. Any exceptions to the standard terms designated at the URL can be negotiated and drafted into the operative agreement.

Of course, as with all negotiations, the likelihood of incorporating one of these options depends on the parties’ respective negotiating stance. Nonetheless, the customer has every incentive to clarify its rights and obligations before entering into a service agreement. When hyperlinked terms are included in the contract, the risks associated with them must be understood and minimized as best as possible.

If you have questions about vendor codes of conduct, please contact Brad Auerbach at bauerbach@outsidegc.com or 310-382-0019.

Brad Auerbach is a Partner with our California-based team, bringing over three decades of senior in-house counsel experience in the media, gaming and technology industries. Brad has been involved in structuring many groundbreaking deals with a diverse range of rights holders, including NFL, NBA, NHL, HBO, MTV, ESPN, Sesame Workshop, Nickelodeon, Live Nation, Marvel Entertainment, International Olympic Committee, English Premier League, Screen Actors Guild, every significant Hollywood studio, each of the major record labels, many major book and news publishers, several world class photographers and Getty Images, among numerous others.