Karthik Subramaniam and Shrudula Murthy
A contract is an agreement between two parties, that might either be oral or in writing, which creates mutual legal obligations between each other. A contract is extremely important in any business transaction as it clearly sets out the legal relationship between the parties involved, the rights that they possess and the responsibilities that they have to one another. Since the effects of a valid contract are legally binding and therefore enforceable in a court of law, it is extremely necessary for there to exist certain prerequisites for a contract to be considered to be valid in the eyes of the law. There are various elements that create a valid contract.
The basic essentials of a contract consist of 3 elements:
- An offer
- Acceptance of the offer
- Valid consideration for the transaction.
These 3 elements form the basic elements of a simple contract. Another important element of a valid contract is consensus ad idem, or the meeting of minds. It refers to the understanding or comprehension of the contract by both parties, and both of them being in mutual agreement of the same thing in the same sense.
The 3 elements of a contract, as well as the principle of consensus ad idem are essential in analysing the following 2 questions that arise in understanding whether Disney was successful in creating a contractual agreement between them and twitter users who used #MayThe4th.
A. Were the three basic essentials of a contract present?
To be able to use or access any content online, platforms provide certain terms and conditions that need to be accepted and adhered by the users. These platforms provide a plethora of services ranging from hosting user content to allowing advertisement presence for users and developers. In a “transaction” such as this, the service provided, would be considered as the offer, the Terms and Conditions that the user would have to abide by would be considered as the consideration, and the assent to follow these terms while using the service so provided would amount to acceptance.
Disney tried to create a contractual relationship with the users without having an existing offer in the first place. While the Terms and Conditions did exist, and a user could have assented to them, there was nothing present that could constitute an offer. To offer a service or a good to any individual, one must have ownership over the same. In the case of Disney trying to create a contractual relationship with twitter users who used #MayThe4th, it has been clearly established that Disney did not have any actual ownership over the hashtag MayThe4th.
In this case, if Disney had ownership over the hashtag, them, allowing users to use the hashtag would be considered as the provision of a service. With Disney not having ownership over the hashtag, they essentially do not provide any service, thereby ensuring that Twitter users need not abide by any of the Terms and Conditions put forth by Disney over the usage of the hashtag.
The absence of one of the basic elements required for a contract to be valid clearly did not exist in the above case. Disney was thus unsuccessful in its attempt to create a contract.
B. Was there consensus ad idem between Disney and twitter users who used the hashtag?
While it was clearly established that Disney does not have any rights over the usage of #MayThe4th, let us consider a scenario where they do have trademark rights over the term, or had suggested the usage of a different hashtag that they did have complete rights over. In such a case, the three basic elements of a contract; an offer, consideration, and acceptance would be present. However, this still doesn’t amount to a valid contract.
Consensus ad idem implies that all the parties to the contract have a mutual understanding and comprehension of the contract that they are getting into. Disney’s first tweet did not include the terms and conditions, but they rather chose to put a follow up tweet which imposed a contractual obligation on twitter users based on the directions of the first tweet. It was due to this split nature of the tweet that a lot of confusion ensued. The first tweet did not give any indication of the fact that any terms and conditions would be applicable, or that there even existed a follow up tweet. It was only the second tweet that made the existence of a legal notice clear. Due to these reasons, any individual using #MayThe4th could have used the hashtag without reading the second tweet, consequently not having any knowledge of the existence of a legal notice. Due to the popularity of Twitter as a social media platform with a tremendous amount of content being uploaded on it constantly, coupled with the massive popularity of the hashtag MayThe4th, many users could have put forward a tweet containing the hashtag without any knowledge of the legal notice being imposed on them. Both these conditions indicate the absence of a mutual understanding between the parties implying that there was no consensus ad idem, thereby invalidating the contract.
In the last part of this series we try to dig into the possible intentions behind Disney putting forth the terms and conditions and what the future implications of that would entail.
To read the first part of the blog, click here.
This is part 2 of the 3-part blog written by Karthik Subramaniam and Shrudula Murthy, Second Year Undergraduate students of Law at NALSAR University, Hyderabad. The authors can be reached at their respective email id [email protected] and [email protected]
Picture courtesy: https://www.starwars.com/star-wars-day (Image in Public domain)–