Court sides with internet users against unreasonable user agreements

A U.S. District Court ruling could have wide-ranging and perilous consequences for internet commerce and community sites. Blockbuster (BBI) has been fighting a potential class action suit over its involvement in the now infamous attempt by Facebook to monetize its site by sharing members' purchasing histories. Blockbuster claimed that a clause in its user agreement, which gave it carte blanche to change the agreement with its users as it desired, sheltered it from such suits.

The court ruled otherwise, however, finding that the terms of the contract claiming the company had absolute right to change the agreement at its discretion were "illusory." It also overrode the clause in which members agreed to have any disputes settled by arbitration. Barring a reversal of this judgment, the way has been cleared for a class-action suit, a nightmare scenario for just about any business.