As you read this sentence, someone is accepting — without thought — online terms and conditions to purchase the latest version of Angry Birds. Online terms and conditions are not limited to $1.99 application purchases, however, and are increasingly incorporated by reference into a variety of contracts. Indeed, as a number of courts across the country are using traditional contract principles to enforce online terms and conditions incorporated by reference into contracts, there may be surprising effects on insurers.
Incorporation by Reference
Under standard contract principles, a party may incorporate contractual terms by reference into a separate, noncontemporaneous document, if the contract expressly references and describes the document and the parties to the agreement agree to the incorporated terms. As commerce continues to move online, an emerging area of law is the enforceability of online terms and conditions incorporated by reference into other contracts.
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