Coast-to-Coast Harmony over Browsewrap Agreements

 BY KIMBERLY CULP

Ultimately, the courts concluded that the terms of use were too inconspicuous to impose constructive knowledge on Plaintiff.

Website disclosures are a hot topic these days, and are not new. And yet, you should still be paying attention to the law as it evolves around this important component of your website. There are nuances to consider, and, in California, we now have some clarity on how to analyze a browsewrap agreement.

 In Long v. Provide Commerce, Inc., 245 Cal. App. 4th 855 (Cal. Ct. App. Mar. 17, 2016), the California Court of Appeal considered a trial court’s denial of a motion to compel arbitration. Defendant sought to compel arbitration based on a provision in the website’s terms of use, which provision was viewable via a hyperlink at the bottom of each page of the operative website (i.e., the “browsewrap agreement”). Plaintiff opposed the motion to compel arbitration. 

The trial court denied the motion and the court of appeal affirmed. Ultimately, the courts concluded that the terms of use were too inconspicuous to impose constructive knowledge on Plaintiff.

The Court of Appeal did not stop, however, with its conclusion that the lack of conspicuousness resolved the instant matter. The Court went on to agree with the Nguyen case, from the Ninth Circuit, that to establish the enforceability of a browsewrap agreement a textual notice should be required to advise consumers that continued use of a website will constitute the consumer’s agreement to be bound by the website’s terms of use. 

The Long court wrote that, “[i]n our view, the problem with merely displaying a hyperlink in a prominent or conspicuous place is that, without notifying consumers that the linked page contains binding contractual terms, the phrase ‘terms of use’ may have no meaning or a different meaning to a large segment of the Internet-using public. In other words, a conspicuous ‘terms of use’ hyperlink may not be enough to alert a reasonably prudent Internet consumer to click the hyperlink.” 

The Nguyen court constructed a bright-line rule for determining the validity of browsewrap agreements that the California Court of Appeal adopted in Long: “[W]here 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.” 

Companies that go to the effort of drafting terms of use should go to the extra effort of making those terms of use enforceable. This will be a context-driven analysis based on a specific website design, but one that could be a game changer in litigation. Helpfully, though, the Long case is consistent with other recent browsewrap decisions.

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