Can You Change Your Software Contracts Unilaterally?

Short answer: yes, you can reserve the right to change your software contract, but a clause that lets you change “any term at any time in your sole discretion” can backfire badly. In Harris v. Blockbuster, that exact language made the company’s arbitration clause unenforceable, because a promise you can rewrite at will is no promise at all.

You have probably seen the sentence in electronic contracts where one party, always the one that wrote it, can change the agreement “at any time, in its sole discretion.” It feels safe. It is not.

What Happened in the Blockbuster Case.

Blockbuster ran a program called “Beacon” that shared customers’ movie-rental information with Facebook, allegedly without clear advance permission. Customers sued. Blockbuster then tried to push the dispute into arbitration under its online Terms and Conditions. The court refused. In Harris v. Blockbuster (N.D. Tex. 2009), the judge held that because Blockbuster could “at any time, and at its sole discretion, modify these Terms and Conditions,” its promise to arbitrate was illusory. A promise you can change or take back whenever you like is not real consideration, so the clause could not be enforced. A contract needs consideration from both sides, and a blank-check change clause guts it.

Why This Should Worry a Software Vendor.

Think about what your end-user agreement is protecting. Maybe it is an arbitration clause, a class-action waiver, or a limitation of liability. An over-broad “we can change anything anytime” provision can put all of it at risk. The court does not just strike the change clause. It can treat the protections you actually care about as illusory too. So the very flexibility you wrote in to protect yourself is what hands the other side an argument to ignore your terms.

How to Reserve Change Rights Without Voiding Your Contract.

The fix is not to give up the right to update your terms. It is to make the mechanism look like a real agreement instead of a blank check. Three practical moves work:

• Give notice with an effective date. Tell users a change is coming and when it takes effect, rather than changing silently “with or without notice.”
• Tie material changes to renewal. Apply significant changes at the start of a renewal term, not mid-term, so the user accepts them by renewing.
• Keep “change anytime” language for policies, not the contract. Policies are unilateral by nature and can change; the binding agreement should not read like one.

Courts will accept a change mechanism that respects both sides. They reject one that lets you rewrite the deal while still holding the other party to it. The same theme runs through how you capture agreement in the first place: whether a clickwrap agreement is enforceable turns on how you built the flow, not just the words. And whether something belongs in the binding contract or a changeable policy is its own decision (see Contract or Policy?).

Frequently Asked Questions.

Can I ever change my terms unilaterally? For policies, generally yes. For the binding contract, only through a mechanism that gives notice and a real chance to accept or reject, such as changes that take effect at renewal. A pure “anytime, sole discretion” clause is the risky one.

Why did one clause sink the whole arbitration provision? Because it made Blockbuster’s promise illusory. If you can rewrite or revoke a promise at will, courts treat it as no promise, which removes the consideration the clause needs to stand.

Does this apply outside Texas? The illusory-promise principle is general contract law, not unique to Texas, so courts elsewhere have reached similar results. Do not rely on a blank-check clause anywhere.

Reserve the right to update your terms, but do it with notice and at renewal. I hope this helps.

For the foundational decision between an EULA structure and a SaaS subscription structure, see SaaS Agreement vs. Software EULA: Which Template Do You Need?

Disclaimer:

This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.