I have been working on a SaaS product for about a year and a half (on and off, among other projects). Lately I have gotten serious about the product. While doing a routine evaluation of competitors out there who are attempting or have launched a product similar to mine, I came across one in particular who had very direct and threatening language in their terms and conditions, something along the lines of:
"If you are a competitor and are accessing the site, you agree you are liable for no less than one million US dollars"
In no way do I agree to that obviously, but what line must one cross before one can be legally liable for monetary damages simply for accessing a site? Is this even enforceable?
The questions arising from all this are:
If you want to get into the technicalities, that would probably be considered a shrinkwrap license which requires you to break the license (open the shrinkwrap, visit the site) just to read the license.
If those are your competitors, congrats. Imagine how they treat their customers.
I won't focus on whether the browsewrap terms are enforceable. On this topic, please see Online Terms can be Binding, even if You don’t have to Click! I will focus on the $1 million provision. This is a liquidated damages provision. Such a provision is enforceable only if:
It is not clear wither the first criterion has been satisfied. However, I can write with confidence that the second criterion has not been satisfied. Accordingly, this liquidated damages provision would not be enforced - which agrees with the common-sense reaction that the provision is preposterous on its face.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.
I suspect the goal here is to scare competitors rather than to provide a basis for litigation. In my limited opinion, it seems highly unlikely to be successfully enforced. What injury do you cause simply by accessing the site?
Browserwrap conditions are also subject to various interpretations, but consider the following from the wikipedia entry:
A browse-wrap agreement can be formed by use of a web page or aSimply visiting the site doesn't fit the assent model - otherwise, they could sue google from visting their site and telling the world (and their competitors) about their awesome product.
hyperlink or small disclaimer on the page. It may only be enforced if
the browsing user assents to it.
Firstly I don't think
But, I also don't think this is a shrinkwrap as per the wikipedia case. The word "accessing" may mean different from "viewing". You can view any public pages on their site freely, but you may need signing up or providing contact info to access the private area.
In such case you know your intent before accessing, and you should have an opportunity to review the terms and conditions before accessing the private area.
You have accepted the terms so you should be prepared to be bind. Though the claim of a million dollar sounds ridiculous, they should have right to claim something.
Conveniently, most jurisdictions separate business entities and people, so while your business may be their competitor, it is you, not your business, that is accessing their site.
In fact, it is impossible for your business to access any website, given that it is not a physical entity, but merely a notional legal entity.
Of course, IANAL, IMHO, YMMV, etc.