Browsewrap agreements are common in online retailing as a tool to reduce the transaction time required for online purchases while simultaneously providing the user with information about the terms of the sale. Because a user may not actually read a browsewrap agreement, the validity of a browsewrap agreement turns on whether, in using the website, the user should have known that she was agreeing to a contract about her use of the website.
This decision serves as a reminder to online retailers that they should be clear with consumers when seeking to create enforceable browsewrap agreements—especially with arbitration clauses. While browsewrap agreements have greatly reduced barriers to transaction in the online marketplace, the law is developing to protect the widest range of consumers possible. And although some purchasers of online goods may be able to understand that they are agreeing to the terms in browsewrap agreements, the Court of Appeal now warns that it will seek to protect even the least savvy shopper from being bound to terms that they were not aware existed. Going forward, online retailers should heed the Court of Appeal’s call to provide conspicuous disclosure of both the hyperlinks to their browsewrap agreements and the textual notice indicating their intent to bind users to their browsewrap agreements.
The Meyer court found that, like in Long, the checkout flow was “laid out in such a manner that it tended to conceal the fact that placing an order was an express acceptance of [defendant’s] rules and regulations.” Id. at *8 citing Long, 200 Cal. Rptr. 3d at 126. And because the terms of service “hyperlink[ ]—[its] placement, color, size and other qualities” relative to the overall design of the registration screen was “simply too inconspicuous” to meet the Specht standard, Meyer’s attention was not adequately called to the existence of the Terms of Service and he could not have agreed to them. Id. at *9 citing Long, 200 Cal. Rptr. 3d at 125-26.
Though attempts have been made to create new classifications of internet agreements and to identify where, on the spectrum between click-wrap and browsewrap, internet agreements fall, the Meyer court explained that whether Meyer “agreed to arbitrate his claims ‘turns more on customary and established principles of contract law than on newly-minted terms of classification.’” Id. at *7 citing Cullinane v. Uber Techs., Inc., No. 14-cv-14750, 2016 WL 3751652 at *6 (D.Mass. July 11, 2016). Meyer serves as an example of direct application of the Long holding in instances where California law applies.
NOTE (November 23, 2016): This article has been updated since its publication to include the final section discussing Long's impact in the months following the decision.