Courts continue to provide guidelines on how to create enforceable online agreements, and, perhaps more importantly, what does not create binding terms. Several recent cases have discussed the enforceability of “clickwrap” and “browsewrap” agreements.
We are all familiar with clickwrap agreements—the terms and conditions contained in the little pop-up boxes you encounter on a website which require you to click a button indicating you accept the terms. On the other hand, as a district court noted in Nguyen v. Barnes & Noble, Inc., “Browsewrap agreements, as opposed to clickwrap agreements, are defined as ‘terms and conditions, posted on a Website or accessible on the screen to the user of a CD-ROM, that do not require the user to expressly manifest assent, such as by clicking ‘yes’ or ‘I agree.’”
In Van Tassell v. United Mktg. Grp., consumers brought a class action against an online retailer, and the retailer tried to enforce an arbitration provision in its browsewrap agreement. The retailer’s terms did not appear on either the retailer’s homepage or the checkout page. To find the retailer’s terms, consumers had to scroll down to the bottom of the homepage and click the “Customer Service” link, then scroll to the bottom the Customer Service page, or click on the “Conditions of Use, Notices & Disclaimers” link located near the end of a list of links on the page. The court held that “because no affirmative action is required by the website user to agree to the terms of a contract other than his or her use of the website, the determination of the validity of a browsewrap contract depends on whether the user has actual or constructive knowledge of a website's terms and conditions.” The court further stated that “absent a showing of actual knowledge of the terms by the webpage user, the validity of a browsewrap contract hinges on whether the website provided reasonable notice of the terms of the contract.” Given the multiple steps that consumers had to go through to find the retailer’s terms and the fact that the link to the terms was “sandwiched between” other links, the court found that the consumers did not have reasonable notice of the retailer’s terms and, therefore, the arbitration provision was not binding.