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.

Arbitration is an alternative to bringing a lawsuit to settle a dispute.  In arbitration, the parties give up their right to sue in court in favor of letting an arbitrator settle their dispute.  Policy considerations favor enforcing arbitration agreements, but the parties must still objectively agree to arbitrate before arbitration provisions can be enforced.  The threshold question in any petition to compel arbitration is whether the parties agreed to arbitrate.

The basic rules of contract formation apply to contracts formed on the Internet.  Did the parties mutually assent to form a contract? 

California law is clear—an offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious.

(Opinion pdf page 7).

Internet contracts can be formed either through clickwrap or browsewrap.  Clickwrap contract formation requires the website user to click on an “I agree” box after terms and conditions of use are presented.  Browsewrap contracts are formed by the website user remaining on the website without taking other action.  This dispute involves a browsewrap agreement.

Unlike a clickwrap agreement, a browsewrap agreement does not require the user to manifest assent to the terms and conditions expressly.  A party instead gives his assent simply by using the website.  Indeed, in a pure-form browsewrap agreement, the website will contain a notice that—by merely using the services of, obtaining information from, or initiating applications within the website—the user is agreeing to and is bound by the site’s terms of service.  Thus, by visiting the website—something that the user has already done—the user agrees to the Terms of Use not listed on the site itself but available only by clicking a hyperlink.  The defining feature of browsewrap agreements is that the user can continue to use the website or its services without visiting the page hosting the browsewrap agreement or even knowing that such a webpage exists.  Because no affirmative action is required by the website user to agree to the terms of a contract other than his or her use of the website, the determination of the validity of the browsewrap contract depends on whether the user has actual or constructive knowledge of a website’s terms and conditions.  More to the point here, absent actual notice, the validity of a browsewrap agreement turns on whether the website puts a reasonably prudent user on inquiry notice of the terms of the contract.

(Opinion pdf pages 7 – 8).

The Court of Appeal held that’s terms of use hyperlinks were not sufficiently conspicuous to put a reasonably prudent Internet consumer on inquiry notice and that Long did not unambiguously consent to be bound by the website’s terms of use.  Provide did not dispute Long’s assertion that Long had no actual notice of the terms of use. 

Specifically, “the design of the website, even when coupled with the hyperlink contained in the confirmation email, was insufficient to put Plaintiff on inquiry notice of the subject Terms of Use.” (Opinion pdf page 9).

Indeed, our review of the screenshots reveals how difficult it is to find the Terms of Use hyperlinks in the checkout flow even when one is looking for them.  This of course is to say nothing of how observant an Internet consumer must be to discover the hyperlinks in the usual circumstance of using to purchase flowers, without any forewarning that he should also be on the lookout for a reference to ‘Terms of Use’ somewhere on the website’s various pages.  Contrary to Provide’s characterization, the subject hyperlinks in the checkout flow are not ‘located next to’ the fields and buttons a consumer must interact with to complete his order.  Those fields and buttons are contained in a separate bright white box in the center of the page that contrasts sharply with the website’s lime green background.  To find a Terms of Use hyperlink in the checkout flow, a consumer placing an order must (1) remove his attention from the fields in which he is asked to enter his information; (2) look below the buttons he must click to proceed with the order; (3) look even further below a ‘VeriSign Secured’ logo and notification advising him that his ‘order is safe and secure,’ which itself includes a hyperlink to ‘Click here for more details’; (4) look still further below a thick dark green bar with a hyperlink for ‘SITE FEEDBACK’; and (5) finally find the ‘TERMS OF USE’ hyperlink situated to the right of another hyperlink for the website’s ‘PRIVACY POLICY,’ both of which appear in the same font and light green typeface that, to the unwary flower purchaser, could blend in with the website’s lime green background.  True, on a handful of these pages no scrolling is required to complete the hunt.  But that, in our assessment, does not change the practical reality that the checkout flow is laid out in such a manner that it tended to conceal the fact that placing an order was an express acceptance of Provide’s rules and regulations.

(Opinion pdf pages 12 – 13).

The Court of Appeal disagreed with Provide’s contention that its order confirmation email to Long provided the required notice.  Long would have had to scroll down past a summary of the order details, several logos and customer service information to find a hyperlink to “Terms,” printed in grey typeface on a white background.  This is not a conspicuous notice that would put a reasonably prudent Internet consumer on notice to investigate for a binding arbitration clause.

The Court of Appeal opined on the requirements for an enforceable browsewrap agreement:

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.  In 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.  While failure to read a contract before agreeing to its terms does not relieve a party of its obligations under the contract, the onus must be on website owners to put users on notice of the terms to which they wish to bind consumers.  Given the breadth of the range of technological savvy of online purchasers, consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound. Online retailers would be well-advised to include a conspicuous textual notice with their terms of use hyperlinks going forward.

(Opinion pdf pages 13 – 14).

This case is Long v. Provide Commerce, Inc., No. B257910, California State Court of Appeal, Second District, Division Three.

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