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Canadian Real Estate Industry Changing Due to Court Decision Against Zoocasa?

October 25, 2011

Merely browsing a Canadian Real Estate website could amount to signing a contract

Canadian Real Estate, Zoocasa, Court decision

The BC Supreme Court recently ruled against Zoocasa - (a Canadian Real Estate website & subsidiary of Rogers Communications) in their data-skimming battle with Century 21 Canada Ltd. The ruling may have far-reaching implications for Canadian Real Estate and the so-called 'compiler-sites' all across Canada.

In Century 21 Canada Ltd. Partnership v Rogers Communications Inc., the court ruled that simply browsing a website may result in the formation of an enforceable contract - if certain conditions are met. This sets an important precedent for anyone that operates or uses a Canadian Real Estate website, but especially those companies that 'skim' information from other sites where the terms of use prohibit it.

The Argument Against Zoocasa

Zoocasa operated a website that 'indexed' property listings from a number of Canadian Real Estate websites. Zoocasa’s search engine would access Century 21’s website once a day to copy property descriptions and photographs. This information would then be posted on Zoocasa’s site along with Zoocasa's neighbourhood info.

Century 21 sought an injunction and damages against Zoocasa for accessing Century 21’s website and copying its content without authorization. Century 21’s claim was based on the Copyright Act but also on the terms and conditions of its website that prohibited the use of the website for commercial purposes.

The terms and conditions of Century 21’s Canadian Real Estate website were available by clicking on a link at the bottom of the home page. These terms weren't pointed out in any active way. Users didn't have to click on an “I agree” button in order to access the site’s content. Terms and conditions simply stated that the user was bound by them if they entered and used the website.

Zoocasa argued they were not bound by C21's terms and that no contract was ever formed since users of Century 21’s website were not required to agree to the terms and conditions. Zoocasa also argued that since terms and conditions weren't prominently displayed, this constituted an attempt by Century 21 to impose a unilateral contract.

The Ruling: 'Browse wrap agreements' are valid if terms brought to user’s attention

The court dismissed the arguments raised by Zoocasa and ruled that a valid contract may be formed if (i) the terms and conditions are brought to the attention of the user, (ii) the terms are available for review by the user and (iii) the user has accepted those terms in some manner.

In this case the court didn't rule on whether the terms and conditions were 'brought to the attention of the user' since Zoocasa acknowledged that it was aware of them. Besides, Zoocasa was relying on similar terms and conditions on its own website.

Focusing on whether Zoocasa actually accepted Century 21’s terms and conditions, the court said: Taking the service with sufficient notice of the Terms of Use and knowledge that the taking of the service is deemed agreement constitutes acceptance sufficient to form a contract. The act of browsing past the initial page of the website or searching the site is conduct indicating agreement with the Terms of Use if those terms are provided with sufficient notice, are available for review prior to acceptance, and clearly state that proceeding further is acceptance of the terms.

What does this mean to the Canadian Real Estate Industry?

The big issue seems to be 'Who owns the information?' and 'Can you protect your data once it's published on the Web'? I've always been surprised that our Copyright Laws don't seem to protect the information in the first place. Finally we may see some enforcement against the 'data pirates'.

It now appears that the 'compiler sites' like Zoocasa and Zillow may soon be forced to seek data sharing agreements with individual Real Estate Brokerages or Canadian Real Estate Boards if they want to continue repackaging the Broker-originated data and reselling it to the Public.

This article is based on a report by Norton Rose and Domenic Dupoy, writing for a legal newsfeed website called Lexology.

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