Written by
Keenan W. Ng
Recently, the
Ninth Circuit in Nguyen v. Barnes &Noble, Inc. held that “where a website makes its terms of use
available via a conspicuous hyperlink on every page of the website but
otherwise provides no notice to users nor prompts them to take any affirmative
action to demonstrate assent, even close proximity of the hyperlink to relevant
buttons users must click on—without more—is insufficient to give rise to
constructive notice.”
In 2011, plaintiff
purchased two Hewlett-Packard Touchpads from the Barnes & Noble website
during a fire sale. Unfortunately,
despite receiving a confirming email of his purchase, plaintiff’s order was
cancelled due to high demand. Plaintiff
filed suit alleging he had to purchase another tablet at a higher price. Defendant argued that plaintiff must
arbitrate the matter per the browsewrap terms of use agreement.
The issue in the
case was whether plaintiff was compelled to arbitrate as per the terms of use
agreement that was a “browsewrap” agreement found on the Barnes & Noble
webpage plaintiff used to purchase the Touchpad. A browsewrap agreement exists
where a website’s terms and conditions of use are generally posted on the
website via a hyperlink at the bottom of the screen. (In contrast, a “clickwrap” agreement exists
where website users are required to click on an “I agree” box after being
presented with a list of terms and conditions of use.)
Plaintiff argued
because he did not view the browsewrap agreement, he should not be held to
it. The court noted that browsewrap
agreements are enforced where the user has actual notice of the agreement. Register.com,
Inc. v. Verio, Inc., 356 F.3d 393, 401- 404 (2d Cir. 2004). In situations where the user does not have
knowledge of the agreement, the validity of the browsewrap agreement turns on
whether the website places a reasonably prudent user on inquiry notice of the
terms of the contract. Specht v. Netscape Commc’ns Corp., 306
F.3d 17, 30-31 (2d Cir. 2002). Inquiry
notice depends on the design and content of the website and the agreement’s
webpage. Be In, Inc. v. Google Inc., No. 12-CV-03373-LHK, 2013 WL5568706, at
*6 (N.D. Cal. Oct. 9, 2013). That the
agreement was an arbitration agreement was not relevant to the Court’s
analysis.
Barnes &
Noble argued that the placement of the “Terms of Use” hyperlink in the bottom
left-hand corner of every page on the Barnes & Noble website, and its close
proximity to the buttons a user must click on to complete an online purchase,
is enough to place a reasonably prudent user on constructive notice. The Ninth Circuit stated the placement of the
hyperlink was not enough to provide constructive notice, as there exists no
authority supporting that position as well as the court’s reluctance to enforce
browsewrap agreements against individual consumers. The Court further noted that failure to read
a contract before agreeing to its terms does not relieve a party of its obligations
under the contract, Gillman v. Chase
Manhattan Bank, N.A., 73 N.Y.2d 1, 11 (1988). In light of this lack of authority, the Ninth
Circuit held the plaintiff had insufficient notice of Barnes & Noble’s
Terms of Use, and thus did not enter into an agreement with Barnes & Noble
to arbitrate his claims.
In summary, as a
website owner, if you wish to bind your users to your use of terms, we suggest
ensuring your users affirmatively acknowledge acceptance of your terms by using
a clickwrap agreement.
