When a Privacy Policy Leads to a Breach of Contract
It seems like every company has a privacy policy nowadays. Does anybody really pay attention to them?
It appears so. A wave of legal developments — highlighted by the International Association of Privacy Professionals — reveals a rising trend. Privacy policies, website terms of use, and other public statements about data practices are increasingly being treated by courts as enforceable contracts or warranties.
A privacy notice is a public statement that explains how an organization collects, uses, shares, and protects personal information. It is sometimes called a privacy policy, but legally, a privacy notice is meant to inform individuals rather than serve as an internal company guideline. It is usually posted on a company’s website or provided directly to customers.
The main purpose of a privacy notice is transparency. It tells people:
- What data is collected (such as names, emails, browsing history, payment details).
- Why the data is collected (for services, marketing, compliance, etc.).
- How the data is used (to improve services, for analytics, or to meet legal obligations).
- Who it may be shared with (partners, vendors, or regulators).
- How long data is kept and what rights individuals have (access, correction, deletion, opting out).
- How the data is protected (security measures, encryption, limited access).
Courts are scrutinizing organizations’ public data statements — such as privacy notices and website terms — as potential contractual or warranty obligations. Discrepancies between stated policies and actual practices can spark breach of contract claims.
Here’s a look at the types of claims plaintiffs are raising:
- Breach of express contract. When a business fails to honor explicit promises (for example, it may state that it will never share user data, then doing so).
- Breach of implied contract. Even without explicit language, courts may infer that customers expected privacy or data protection based on the business relationship.
- Breach of express warranty. Specific assurances about data security or confidentiality can be enforceable if unmet.
- Breach of implied warranty. Courts may enforce a baseline expectation that a company’s data protection systems meet acceptable standards of quality and reliability.
How Businesses Can Avoid These Pitfalls
- Align policies with reality. Conduct thorough reviews of privacy policies, terms, and notices to ensure they truthfully reflect actual data handling and security practices. Collaboration between legal, IT, marketing, and compliance teams is key.
- Understand customer expectations. Even behaviors or implied claims can form a contract. Identify any actions or communications that suggest an agreement and address them proactively.
- Strengthen data protection programs. Maintain a mature, well-documented data privacy and security program. This includes regular audits, updates for emerging threats, and ensuring practices meet or exceed the standards implied by your public disclosures
Contact a Breach of Contract Lawyer Today
Privacy policies can become binding commitments, leading to a breach in contract if not properly followed.
Companies need to be aware of contracts they may have in place with consumers. A Bradenton breach of contract lawyer from Cahall Law Firm can help you understand your legal options. Schedule a consultation today by filling out the online form or calling our office at (941) 281-2019.
Source:
jdsupra.com/legalnews/litigation-trend-alert-breach-of-2974309/
