Barnes & Noble, a bookseller with both an online presence and brick and mortar stores, tried to unload discontinued Hewlett-Packard Touchpad tablet computers through its website. Barnes & Noble underestimated the demand, resulting in its cancellation of Kevin Khoa Nguyen’s order of two Touchpads. Nguyen was forced to purchase substitute technology at a higher price. Nguyen brought a class action suit against Barnes & Noble, alleging deceptive business practices and false advertising under both California and New York law.
Barnes & Noble argued that its website’s Terms of Use required Nguyen to arbitrate his claim. The district court ruled that Barnes & Noble did not provide reasonable notice of its Terms of Use to Nguyen and that Nguyen did not unambiguously consent to the arbitration provision. The Ninth Circuit Court of Appeals agreed. Website owners cannot rely on Terms of Use hyperlinks posted at the bottom of the page and near the checkout button to put consumers on notice of the content of the Terms of Use.
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