The U.S. 9th Circuit Court of Appeals “consider[s] whether a service provider may change the terms of its service contract by merely posting a revised contract on its website” and decides it cannot. In Douglas v. Talk America Inc [PDF] the facts were that Douglas had been a customer of AOL, Talk America’s predecessor, from whom he purchased telephone services. When Talk America bought AOL it changed the terms of service in various ways including the addition of more charges, which changes it posted on its website. Douglas was unaware of the changes, and when, after four years of using and paying Talk America, he discovered the changes he filed a class action.
The court essentially said that contract law applies and to be enforceable a changed contract requires that both parties know of and accept any changes — this despite the wording of the revised terms, purporting to make them binding simply by unilateral fiat. Douglas had no obligation, as Talk America argued, to check the contract as published on the website and thereby discover any changes.
There’s a story on the case on Computerworld.