Best Practices for Avoiding Misleading Browsewrap and Clickwrap Agreements in Cyberspace

Ruth Binger

By Ruth Binger

Visiting a website and merely viewing its contents can bind you to an internet “Terms and Conditions” or “Terms of Use” (“browsewrap” or “clickwrap”) contract.

Website owners, as technology providers, have a dilemma as they wish to facilitate business in the most efficient way. Maintaining the integrity of their software by controlling the scope of the limited software license they are offering is essential to protecting their copyrighted technology.

Given website owners are offering their services to the world, a pressing concern is a disgruntled website user who sues via a class action in the user’s home state. The issue for the courts is how many dispute resolution pre-existing legal rights a website owner can remove through its browsewrap contract, often called “Terms and Conditions,” if the website user receives little to no notice of its existence or has no knowledge that such a notice refers to a binding contract.

If you look carefully at a website you frequently use, you are likely to see various notices in capital letters in highlighted colors referencing that your use of the website is an automatic agreement to the website policies of privacy and terms and conditions. You may not know that this means you are binding yourself to a contract. If you do click on that bothersome notice link, you will most likely notice a nonnegotiable contract that contains a choice of law, agreement to arbitrate, and/or class action waiver. Given the limited attention span of a website user, most users will not click on the link. This is especially true if the website owner has buried the notice at the very end of the page, made it as inconspicuous as possible, and does not require any action to proceed with using the website.

Because of the lack of face-to-face interactions, website owners are forced to use clickwrap or browsewrap contract formats to bind the user to a contract. Both of these contracts are “take it or leave it” contracts. These contracts generally attempt to waive pre-existing legal rights by mandating a forum selection clause and choice of law (required to sue in the website’s preferred state) and/or a mandatory arbitration clause which prohibits class actions. However, to establish an enforceable contract the website owner must prove that the user assented or agreed to a contract through one of two ways:

  1. Clickwrap Agreement: An agreement where the website user is presented with a drop-down box or a hyperlink and must click through to access the contract. To continue with the desired transaction, the user must agree to the contract by clicking to accept. This is an actual knowledge agreement because the user was required to read the agreement.
  2. Browsewrap Agreement: A constructive knowledge agreement obtained through circumstances. Notice of the contract is generally found buried via a hyperlink to another web page that contains Terms and Conditions. There is no requirement that the user click on the hyperlink, much less review or agree as to what is on the hyperlink to proceed. Assent is asserted on the basis that somewhere on the page the user is alerted to a hyperlink containing the Terms and Conditions. Any use of the website (mere browsing or using services, initiating an application, ordering an item, etc.) constitutes assent.

Below are descriptions of two illustrative browsewrap cases: a 2009 Missouri browsewrap case regarding a forum selection clause and a 2016 California case concerning a browsewrap contract with an arbitration clause. The cases illustrate that enforceability of your browsewrap agreement depends upon the state/federal court in question, notice, and whether arbitration or a forum selection clause is at issue.

Courts are increasingly finding browsewrap agreements to be unenforceable. Clickwrap agreements also can be onerous and misleading. Bottom line, website owners have to carefully write their contracts to prove notice and assent given that the law is in flux.

Forum Selection Clause Example

Major v. McCallister, 302 S.W.3d 277 (Mo.App.S.D. 2009). Victoria Major, a user of a Service Magic website, sued Service Magic in a Missouri state court for violating its website representations regarding recommended vendors. Service Magic moved to dismiss on the following grounds:

  • The Terms of Use were presented in browsewrap format with a blue hyperlink.
  • The Terms of Use hyperlink was clearly visible next to a button which read “By submitting you agree to the Terms and Use.”
  • Major clicked on the button to agree to the Terms and Use.
  • Major did not click on the link and never read the Terms and Use providing that all lawsuits must be bought in Denver.

The Southern Missouri Court of Appeals found the Terms of Use to be enforceable. According to the court, the link was plainly visible (blue hyperlink placed right next to order button) and was sufficient to place the website user on reasonable notice of the terms and subsequent use by end user was manifested assent to those terms.

Recent 2016 Arbitration Case

Long v. Provide Commerce, Inc., (Cal.Ct.App. March 17, 2016) WL 1056555. Brett Long, a user of a website owned by Provide Commerce, purchased a Mother’s Day floral arrangement which was advertised as an assembled product. However, the arrangement was delivered as a “do it yourself” product. Long filed a consumer fraud claim class action.

Based on an arbitration clause found in its Terms and Conditions, Provide moved the California Superior Court to dismiss Long’s class action suit and compel arbitration. Provide’s evidence consisted of screen shots from the website showing that at the time the order was placed, the Terms of Use were available via a capitalized hyperlink titled “Terms of Use” located at the bottom of each page. The hyperlink was in light green typeface on the website’s lime green background and was placed among 14 other capitalized and underlined hyperlinks of the same color, font and size. Once Long inputted information and clicked through a “checkout flow,” a white box appeared with a notice indicating “Your order is safe and secure.” Below that white box was a dark green bar with a hyperlink titled “SITE FEEDBACK” displayed in light green typeface. Finally, below that green bar were two hyperlinks titled “Privacy Policy” and “Terms of Use” in the same light green typeface on the website’s lime green background. A confirming email was sent after the order was placed and the “Terms and Conditions” were even less conspicuous.

The court found that the design of the website and the conspicuousness of the hyperlinks to the Terms of Use were not sufficient to put a reasonable prudent internet user on inquiry notice of the browsewrap agreement’s existence and contents. In the court’s assessment, the checkout flow was laid out in such a manner to conceal the fact that placing an order was an express acceptance of the Provide’s contract. Simply using a “Terms of Use” hyperlink did not alert the public that they were agreeing to a contract even if it was placed in a prominent or conspicuous place. The court commented that merely notifying consumers that a linked page existed without notifying users that the linked page contained binding terms “may have no meaning or a different meaning to a large segment of the internet-using public.”

Ways to Increase Enforceability with Browsewrap Agreements in the Future

The law is changing rapidly now, but below are current best practices.

  1. Provide a prominent and mandatory “I Agree” selection for the Terms of Use. Make sure that the clicking “I agree” button specifically states that the user read the Terms of Use, is agreeing to the Terms of Use, and that those Terms of Use contain an enforceable contract. Insert an explanatory sentence specifically stating that continuing to use the website constitutes assent to that contract. Don’t try to bury the hyperlink containing the Terms and Conditions by misleading the customer into thinking it is really for something else entirely such as authorization to obtain personal information, etc.
  2. Make language and hyperlinks clear and conspicuous. Do not set out to mislead. Location and conspicuousness of the contract notice link is critical. The style, mode of presentation, and placement of the contract notice is critical. Warning text should be colorful and the size, text, and location should be very clear. Say it over and over. The contract notice text and hyperlink should be placed on every single page. The hyperlink should be visible without scrolling on some of the pages.
  3. Use clear and specific language at the “Buy Now” phase. Make it perfectly clear that by clicking on “Buy Now” the purchaser is agreeing to a contract and provide a conspicuousness link to the contract. Place the hyperlink close enough to the “Proceed with Checkout” that the user would have to bring the link within their field of vision to complete the online order. Urge the website user to take affirmative action to demonstrate assent by reviewing terms prior to clicking a button to complete the transaction so they realize they are entering into a contract. Don’t submerge the clause so buyer won’t notice it.
  4. Maintain a Website Update History. Have proof that the contract terms were present on the website on the date of purchase and what the website user was required to do to manifest assent on that date.
  5. Coordinate. Website designers, technology experts, and attorneys have to work together. Making a website look clean and usable or software friendly will very likely conflict with the notice requirements of browsewrap agreements.

Given that more and more cases are finding browsewrap agreements unenforceable, the safest course of action may be to use a clickwrap agreement to attempt to bind the website user to your terms and conditions contract. In all events, clickwrap agreements are not failsafe. Website owners must actively try not to mislead website user customer.

Posted by Attorney Ruth A. Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice.

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