The Disney lawsuit: why terms and conditions matter

Terms and conditions are everywhere. Whether you’re installing an app on your phone or signing up for a gym membership, there’s almost always fine print attached – and understanding it can be vital. 

If you’ve ever clicked ‘I Agree’ without reading the terms and conditions in full (and you wouldn’t be the first), you may be putting yourself at risk of encountering some messy legal problems down the line– as one man discovered on a well-publicised trip to Walt Disney World.  

With the expertise of Deakin Law School lecturer Claudio Bozzi, let’s dive into why terms and conditions are important, what happens when you break terms and conditions and how one Disney lawsuit became the perfect case study for this issue. 

What do we mean by terms and conditions, exactly? 

Though we take the phrase in one gulp, ‘terms and conditions’ actually refers to two slightly different parts of a contract.  

Terms, says Bozzi, ‘are those statements which set out the rights and obligations of the parties to the contract.’ They can be expressed or implied and generally involve some sort of exchange. ‘For example, in an employment contract, the employer provides their services and labour. In return, the employer pays the employee a wage,’ Bozzi says. 

Conditions, on the other hand, are the ‘things’ that the parties must do to fulfil the contract. ‘That’s to say, it’s an obligation to which the parties must comply,’ says Bozzi. A condition might be purchasing a house in order to bring a home loan contract into effect.  

Or, as we’ll see shortly in the case of the Walt Disney lawsuit, a condition could be an agreement that prevents future legal action. 

Why are terms and conditions important? 

When you sign a contract, the terms and conditions lay out what each party is obligated to do. 

Contracts are legally binding and, if anyone breaks the terms and conditions, it can be bad news, legally speaking.  

If, for example, one party to the contract refuses or fails to hold up their end of the bargain – in other words, if there’s a breach of contract – they leave themselves vulnerable to legal action. 

Sometimes, disputes erupt because one or more parties has misunderstood a contract’s terms and conditions (or failed to read them at all).  

Tragically, this was the sticking point in the 2023 ‘Disney lawsuit’ – a case that followed a tragic death at Walt Disney World in Florida and one man’s attempt to find justice. 

The 2024 Walt Disney lawsuit explained 

In 2023, Jeffrey Piccolo visited Walt Disney World with his wife Dr Kanokporn Tangsuan. While eating at one of the resort’s restaurants, Tangsuan had a fatal anaphylactic allergic reaction to the food, despite having confirmed with staff that the restaurant was allergen-free.   

Piccolo filed what’s being called the ‘Disney lawsuit’ – a wrongful death suit against Disney. However, the defense has hinged on some surprising terms and conditions.  

‘Disney argued that the court should dismiss the proceedings because Mr Piccolo had entered an agreement with them years prior to his wife’s death when he signed onto a free trial of the streaming service Disney+, and again when he purchased the tickets for the theme park online,’ says Bozzi.  

According to Disney, the terms of that agreement prevent the company from being sued, instead requiring the matter to go through arbitration – an alternative to litigation.  

‘Mr Piccolo agreed to arbitration by clicking ‘I Agree’ on the Terms of Use page,’ says Bozzi – a point that has seen Disney receive a healthy amount of backlash.  

As a result of the negative publicity, the Disney lawsuit will now be played out in court instead of arbitration – but this result isn’t the norm. 

Are terms and conditions legally binding? 

The Disney lawsuit shows the power that terms and conditions wield.  

It’s important to remember, however, that not every agreement is a contract. Both parties must be on the same page for an agreement to be legally binding.  

‘The terms and conditions of a contract are legally binding as long as the parties intended to enter a legally binding agreement,’ says Bozzi.  

That means that a promise between friends generally won’t hold up in court.  

‘[Promises between friends] are not legally binding because the arrangement was not intended to be legally binding, even if they are ethically or morally important,’ Bozzi says. ‘For example, if one friend agrees to meet another at a music event and asks the other to buy two tickets and wait outside for him but fails to show up, it’s not likely that the friend who purchased the ticket can sue the friend who did not show up.’   

So, are terms and conditions legally binding? They are if they’re intended to be, but don’t plan on taking a friend to court if they forget you were supposed to catch up. 

‘I agree’: What happens if you don’t read the terms and conditions? 

It’s become something of a running joke – being presented with seemingly never-ending terms and conditions when you’re just to install a computer program or update your smartphone.  

Bozzi says that it’s standard practice for people to click ‘I Agree’ without knowing what they’re agreeing to. 

‘Consumers frequently enter agreements that they are not fully aware of, ‘Bozzi says. ‘People have become more aware of browsewrap, clickwrap, scrollwrap, sign-in wrap contracts – those which we must necessarily say ‘I Agree’ to in order to continue using a service or accessing content.’ 

So, what happens if you don’t read the terms and conditions but click ‘I Agree?’  

It’s definitely worth keeping in mind that failing to read a contract is not a viable way to get around its terms and conditions, which means that Piccolo couldn’t use that as defense in his Disney lawsuit even if he wanted to.  

‘A party cannot avoid the terms of a paper contract on the grounds that they failed to read it,’ Bozzi says. ‘A person who signs a contract without reading it is bound by it if the other party has given them reasonable notice of its terms and conditions.’

As a side note, a laissez-faire attitude to the internet and digital contracts could leave us open to issues beyond breach of contract, including cyber security issues like cyber crime, so it’s always worth paying close attention to any contract you’re opting in to. 

What happens if you break terms and conditions?  

If you break a contract’s terms and conditions, it can potentially leave you open to legal action. 

‘Contracts bind parties to the rights and obligations that are set out in them,’ says Bozzi. ‘They must perform them. If one party does not (breach of contract) the other party has the right to end (terminate) the contract and sue the other party for any losses (damages) they have suffered from that party’s breach of contract.’ 

In the case of Jeffrey Piccolo’s Disney lawsuit, there was no breaking of the terms and conditions. Instead, he agreed to something he did not fully understand. This has ultimately prevented him from suing Disney in court for the tragic and negligent death of his wife. 

The lesson? Despite their tedious length, it pays to fully understand the terms and conditions you’re agreeing to – whether you’re taking out a home loan or signing up for a new streaming service.