Website’s Browsewrap Agreement Inconspicuous and Unenforceable

Brett Long, a California resident, bought Mother’s Day flowers for his mother, living in Kansas, from ProFlowers.com.  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 ProFlowers.com.  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 ProFlowers.com Terms of Use, which required arbitration.  The trial court ruled that the hyperlinks on the ProFlower.com 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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After-the-Fact Email Notification of Online Contract Terms Insufficient

Trilegiant Corp. markets and sells online membership fee programs offering discounts on goods and services.  Brian Schnabel became enrolled in Great Fun, one of Trilegiant’s services, when he made a purchase through Priceline.com, an online travel site.  Edward Schnabel, Brian’s father, became enrolled in Great Fun when he made a purchase through Beckett.com, a sports memorabilia site.  Both Brian and Edward discovered that their credit cards were being billed a monthly fee from Great Fun.  They sought refunds from Trilegiant for every month that they were charged for Great Fun, a service which neither used.  When Trilegiant failed to issue full refunds, Brian and Edward brought suit against Trilegiant on behalf of a class of themselves and similarly situated plaintiffs.

Trilegiant moved to compel arbitration under the Federal Arbitration Act (FAA), asserting that Brian and Edward agreed to an arbitration provision.  The district court denied Trilegiant’s motion.  The Second Circuit Court of Appeals affirmed.  The Second Circuit ruled that Brian and Edward did not assent to an arbitration provision in an email Trilegiant sent to them after they enrolled in the Great Fun program.

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