Tech Law news 16 March 2010

Mozilla Public License

The Mozilla Public License is going to be redrafted.  Although this license is only used by about 2% of open source projects, it is the main license used by Firefox and Thunderbird. A controversial question is whether the new version will be compatible with the Apache license, which allows non-copyleft commercial use.

Ask before linking?

An amusing story about a blogger who actually applied to get written consent before linking to the Royal Mail website, as required by its website terms. This is a relatively common provision in website terms. New Zealand Post’s terms include the provision too (under the heading “Hypertext Links”). While such a provision could, technically, be binding, in practice it will be entirely unenforceable and is therefore pointless. The ongoing presence of the clause in so many website terms is a good example of “precedent” terms being copied without much thought.

“Subject to contract” agreement can be binding

The UK’s highest court, the UK Supreme Court (formerly the Judicial Committee of the House of Lords) has ruled that an unsigned agreement, which was “subject to contract”, had actually become binding because the parties acted as if it had. The Court said:

“… we do not think that the reasonable honest businessman in the position of either RTS or Müller would have concluded as at 25 August that there was no contract between them … all the terms which the parties treated as essential were agreed and the parties were performing the contract without a formal contract being signed or exchanged … The only reasonable inference to draw is that … the parties had in effect agreed to waive the ‘subject to contract’ provision.

It is quite common for technology contracts to get underway before a formal contract is signed. This case is a good reminder that, even where an unsigned agreement clearly states it to be “subject to contract”, one party may not be able to walk away from it if their behaviour is clearly consistent with a binding agreement having been reached.