Reading Room Document

Online Terms of Service Agreements with Open-Ended Indemnification Clauses Under the Anti-Deficiency Act

Traditional principles of contract law govern the standard for consent to an online terms of service agreement, and, as a result, consent to such an agreement turns on whether the web user had reasonable notice of and manifested assent to the online agreement. A government employee with actual authority to contract on behalf of the United States violates the Anti-Deficiency Act by entering into an unrestricted, open-ended indemnification agreement on behalf of the government. A government employee who lacks authority to contract on behalf of the United States does not violate the Anti-Deficiency Act by consenting to an agreement, including an agreement containing an unrestricted, open-ended indemnification clause, because no binding obligation on the government was incurred. The OLC does not provide release dates for its opinions, so the release date listed is the date on which the opinion was authored. The original opinion is available at www.justice.gov/olc/file/2012-03-27-online-tos-agmts/download.

March 27, 2012