Website’s Browsewrap Agreement Inconspicuous and Unenforceable

Brett Long, a California resident, bought Mother’s Day flowers for his mother, living in Kansas, from  Long thought he was buying a completely assembled bouquet, but the flowers arrived as a do-it-yourself-kit.  Long filed suit in California state court against Provide Commerce, Inc., an online retailer and owner of  Long alleged violations of California state statutes and sought to bring a class action. 

Provide moved to compel arbitration, arguing that Long was bound by the Terms of Use, which required arbitration.  The trial court ruled that the hyperlinks on the website were too inconspicuous to put a reasonably prudent Internet consumer on inquiry notice.  On appeal, the Court of Appeal agreed with the trial court.

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Barnes & Noble Browsewrap Terms of Use Get Torched

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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Not All Statements in eBay’s User Agreement Are Binding Promises

The Ninth Circuit Court of Appeals recently ruled that eBay’s User Agreement contains both informal descriptions of how eBay’s system works and legally enforceable promises.  Marshall Block, an eBay seller, filed a lawsuit against eBay.  Block argued that eBay’s Automatic Bidding system violates two statements made by eBay in its User Agreement.  eBay’s Automatic Bidding system automatically enters bids on behalf of the bidder until the maximum set by the bidder is reached. 

No federal law issues were involved in this case.  The federal court system exercised diversity jurisdiction, which occurs when the plaintiff pleads greater than $75,000 in damages and does not share state citizenship with any defendant.  The Ninth Circuit applied California state contract law to decide the case. 

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