May 24, 2016 Articles

Online Indemnification Agreements: Will They Be Enforced?

By Julie Cilia

Most consumers in the United States purchase goods and services online. And most of them never read the “terms and conditions” that are often embedded in their transactions. Yet, those unread terms can include important obligations regarding future disputes, such as provisions requiring the consumer to indemnify the vendor and hold it harmless.

Are such online indemnification provisions enforceable? Little case law directly addresses this question. To be sure, courts have upheld some online indemnification provisions. For example, in One Beacon Insurance Co. v. Crowley Marine Services, Inc., the Fifth Circuit held that a ship-repair contractor was obligated to indemnify a barge owner based on online terms and conditions referenced in the parties’ hard-copy repair service order. 648 F.3d 258, 267–71 (5th Cir. 2011). Similarly, a New York court enforced an indemnification provision found on the defendant’s website, where the purchase order stated that it was governed by the terms and conditions on that website. Bogdanowicz v. N.Y. Univ. Med. Ctr. Condo., 2014 WL 3349644 (Sup. Ct., N.Y. Cty. June 30, 2014). But neither of these rulings arose out of a consumer transaction that occurred wholly online.

Premium Content For:
  • Litigation Section
Join - Now