Obtaining Assent in Today's e-Conomy

Part Two of a Two-Part Article

One aspect of “e-contracts” that has generated a considerable amount of jurisprudence is the enforceability of “clickwrap” and “browsewrap” agreements, in which a consumer manifests assent to terms and conditions either through an affirmative act such as checking a box, or simply by accessing and using the services provided through a Web page. This article presents an overview of best practices for ensuring the application of your client's desired terms and conditions in the context of online browsing and sales, as well as software downloads and installations. Last month's Part One covered clickwrap agreements. Part Two covers browsewrap agreements.

Browsewrap Agreements

In contrast to clickwrap agreements, browsewrap agreements do not require affirmative action on the user's part to manifest assent. As a result, browsewrap cases often present the question whether, under the circumstances, the existence of the agreement was sufficiently conspicuous to place the user on actual or constructive notice of its terms and conditions prior to using the Web site and completing the transaction. Absent such notice, there is likely insufficient evidence to establish a bona fide manifestation of assent by the user. Even with such notice, moreover, browsewrap agreements are less likely to be enforced than clickwrap agreements.

What Establishes Sufficient Notice?

Courts upholding browsewrap agreements typically rely on a combination of factors that, under the particular circumstances, are sufficient to conclude the user was on actual or constructive notice. Thus, there is currently no bright-line rule for determining what is sufficient. Courts review the enforceability of browsewrap agreements on a case-by-case basis, taking into consideration a number of factors ranging from the size of the notifying text and its placement on the Web page, to the experience and computer acumen of the user.

In a somewhat atypical example, the Illinois Court of Appeals determined that blue text signifying a hyperlink to a browsewrap agreement's terms on the bottom of each Web page contributed to a finding that the user had sufficient notice that use of the Web site was governed by contractual terms. Hubbert v. Dell Corp., 835 N.E.2d 113 (Ill. Ct. App. 2005). The court also noted that some pages included a statement notifying the user that purchases made on the Web site were subject to terms and conditions. Id. at 121. According to the court, the combination of these elements would place a reasonable person on notice of the Web site's terms and conditions. Id.

While blue underlined text now is almost universally recognized as indicating the presence of a hyperlink, it is unlikely that such text alone will suffice to place a user on notice of a browsewrap agreement. Rather, where the notification of a browsewrap agreement is “submerged” at the bottom of the Web page in small, inconspicuous font, a court may require additional evidence showing the user was at least on constructive notice of the agreement and its terms.

The Northern District of Texas's decision in Southwest Airlines Co. v. Boardfirst, L.L.C., No. 3:06-CV-0891-B, 2007 WL 4823761 (N.D. Tex. Sept. 12, 2007), illustrates this point. In Boardfirst, the defendant used information it culled from Southwest Airlines' Web site in a manner that violated the site's terms and conditions. The home page of the Web site stated that “use of the Southwest [Web sites] ' constitutes acceptance of our Terms and Conditions.” 2007 WL 4823761, at 4. The court did not hold that this statement was sufficient to notify the defendant of the terms of use. Rather, the court held that the defendant had actual notice of the agreement through a series of cease and desist letters to the defendant that expressly referenced the terms of use; indeed, the defendant's actual knowledge only existed as of the time it received the first cease and desist letter. Id. at 7. Other courts have held that, even absent express notice of a Web site's terms through a written letter, evidence establishing the user's repeated and consistent use of the site can form the basis of imputing knowledge to the user of the terms. See, e.g., Cairo, Inc. v. Crossmedia Servs., Inc., No. C 04-04825 JW, 2005 WL 756610 (N.D. Cal. Apr. 1, 2005) (circumstances created actual or imputed knowledge sufficient to bind user to Web site's terms and conditions).

Similarly, sufficient notice may exist if the evidence shows that the phrase alerting the user to the browsewrap agreement exists on every page of the Web site, and also that the user navigated through several pages of the site. Under such circumstances, one court has remarked that the Web site operator would be “highly likely to succeed in showing that [the] Defendant received notice of the Terms of Use and assented to them by actually using the [Web site].” Ticketmaster LLC v. RMG Techs., Inc., 507 F. Supp. 2d 1096, 1107 (C.D. Cal. 2007). Again, however, additional factors such as the size, placement and conspicuous nature of the notifying statements appeared to influence the court's ruling.

Proving Exposure to the Agreement

A threshold question for the formation of a valid browsewrap agreement is whether the user adequately was exposed to the statement on the Web site purporting to create the agreement. A Web site operator should ensure it has the ability to prove the user actually accessed the site. In some instances, this is inherent in the nature of the site itself. For example, in a site that sells products online, evidence of a user's purchase on the site will suffice to show access. On the other hand, sites that simply provide information or entertainment may have no record of a particular user accessing the site and extracting information. Absent the use of cookies or some other method to document who visits the site, a Web site operator may be unable to prove assent to its terms of use. See, e.g., Fractional Villas, Inc. v. Tahoe Clubhouse, No. 08cv1396-IEG-POR, 2009 WL 465997 (S.D. Cal. Feb. 25, 2009) (failure to prove defendant visited the site precluded showing that defendant accepted forum selection clause in site's terms of use).

Avoiding a Finding of Insufficient Notice

The majority of browsewrap agreements share two common features to their format. First, the notice of the agreement itself is often “submerged” at the bottom of each page on a Web site in the midst of small, inconspicuous text. Second, the notice states that access to the site is governed by its terms of use (or similar language) and then provides a hyperlink to the terms.

Although sometimes viewed as an example of insufficient notice of a clickwrap agreement, Specht v. Netscape is frequently cited to illustrate the insufficiency of notice provided by this “standard” browsewrap format. (The fact that the agreement in Specht was deemed accepted upon the user's clicking a “Download” button, as opposed to simply “browsing” the site, leads some courts to view the agreement as a clickwrap. In this regard, Specht represents one of several cases that blurs the distinction between what technically constitutes a browsewrap agreement versus a clickwrap agreement.) Under the reasoning of Specht, a browsewrap agreement will not be enforced against a user if, under the circumstances, the Web site does “not make clear” to the user that browsing the site would signify assent to its terms. 306 F.3d at 30-31.

While a user has the ability to scroll to the bottom of a screen to observe notice of a browsewrap agreement, there is often no reason to assume the user would do so. Site operators that wish to utilize the browsewrap format should therefore employ a design that places notice of the agreement directly in front of the user upon accessing the site, or otherwise ensures that the user will scroll or navigate to a screen that conspicuously alerts the user to the existence of the agreement. Additionally, the text providing notice of the browsewrap agreement should be conspicuous and, at a minimum, should be distinguished from adjacent text by size, color, font or any combination thereof.

Further, the hyperlink to a browsewrap agreement should link directly to the terms and conditions that will be enforced against the user. Requiring the user to navigate through more than one page in order to access the applicable terms, or to select the correct terms from a list of potentially applicable agreements, may prevent enforcement of the agreement. See, Specht, 306 F.3d at 23-24.

Finally, the statement accompanying the hyperlink should be mandatory in tone and clearly indicate that use of the site constitutes acceptance of its terms and conditions. Permissive phrases or phrases merely “requesting” that the user review and accept the terms and conditions may not be sufficient to form binding agreements. Id.

Concluding Recommendations

The decision whether to use a clickwrap agreement or a browsewrap agreement reflects a balancing of the site operator's preference for an uninterrupted browsing experience against its tolerance for risk in enforcing the agreement against a user. Absent exceptional circumstances, clickwrap agreements usually will provide sufficient notice to bind the user, provided the user is informed that his or her action will constitute acceptance of the agreement's terms.

Browsewrap agreements, in contrast, are inherently less likely to be enforced, although steps can be taken to enhance the likelihood of enforcement. First, the site operator should ensure that it utilized appropriate technology to prove the user actually visited the Web site. Once that technology is in place, the site should be formatted to ensure the notice of the agreement and a link to its terms is within the user's plain view; Web site formats requiring users to scroll through pages to find the notice should be avoided. Furthermore, the notice itself should be sufficiently conspicuous to alert a reasonable person that it holds special significance, particularly if the terms of use include forum selection clauses, arbitration agreements, or other provisions that alter or limit the user's legal rights. Finally, the notice should provide a direct hyperlink to the applicable terms and conditions, and should employ words that unambiguously inform the user that accessing the site will bind the user to its terms.

Part Two of a Two-Part Article

One aspect of “e-contracts” that has generated a considerable amount of jurisprudence is the enforceability of “clickwrap” and “browsewrap” agreements, in which a consumer manifests assent to terms and conditions either through an affirmative act such as checking a box, or simply by accessing and using the services provided through a Web page. This article presents an overview of best practices for ensuring the application of your client's desired terms and conditions in the context of online browsing and sales, as well as software downloads and installations. Last month's Part One covered clickwrap agreements. Part Two covers browsewrap agreements.

Browsewrap Agreements

In contrast to clickwrap agreements, browsewrap agreements do not require affirmative action on the user's part to manifest assent. As a result, browsewrap cases often present the question whether, under the circumstances, the existence of the agreement was sufficiently conspicuous to place the user on actual or constructive notice of its terms and conditions prior to using the Web site and completing the transaction. Absent such notice, there is likely insufficient evidence to establish a bona fide manifestation of assent by the user. Even with such notice, moreover, browsewrap agreements are less likely to be enforced than clickwrap agreements.

What Establishes Sufficient Notice?

Courts upholding browsewrap agreements typically rely on a combination of factors that, under the particular circumstances, are sufficient to conclude the user was on actual or constructive notice. Thus, there is currently no bright-line rule for determining what is sufficient. Courts review the enforceability of browsewrap agreements on a case-by-case basis, taking into consideration a number of factors ranging from the size of the notifying text and its placement on the Web page, to the experience and computer acumen of the user.

In a somewhat atypical example, the Illinois Court of Appeals determined that blue text signifying a hyperlink to a browsewrap agreement's terms on the bottom of each Web page contributed to a finding that the user had sufficient notice that use of the Web site was governed by contractual terms. Hubbert v. Dell Corp. , 835 N.E.2d 113 (Ill. Ct. App. 2005). The court also noted that some pages included a statement notifying the user that purchases made on the Web site were subject to terms and conditions. Id. at 121. According to the court, the combination of these elements would place a reasonable person on notice of the Web site's terms and conditions. Id.

While blue underlined text now is almost universally recognized as indicating the presence of a hyperlink, it is unlikely that such text alone will suffice to place a user on notice of a browsewrap agreement. Rather, where the notification of a browsewrap agreement is “submerged” at the bottom of the Web page in small, inconspicuous font, a court may require additional evidence showing the user was at least on constructive notice of the agreement and its terms.

The Northern District of Texas's decision in Southwest Airlines Co. v. Boardfirst, L.L.C., No. 3:06-CV-0891-B, 2007 WL 4823761 (N.D. Tex. Sept. 12, 2007), illustrates this point. In Boardfirst, the defendant used information it culled from Southwest Airlines' Web site in a manner that violated the site's terms and conditions. The home page of the Web site stated that “use of the Southwest [Web sites] ' constitutes acceptance of our Terms and Conditions.” 2007 WL 4823761, at 4. The court did not hold that this statement was sufficient to notify the defendant of the terms of use. Rather, the court held that the defendant had actual notice of the agreement through a series of cease and desist letters to the defendant that expressly referenced the terms of use; indeed, the defendant's actual knowledge only existed as of the time it received the first cease and desist letter. Id. at 7. Other courts have held that, even absent express notice of a Web site's terms through a written letter, evidence establishing the user's repeated and consistent use of the site can form the basis of imputing knowledge to the user of the terms. See, e.g., Cairo, Inc. v. Crossmedia Servs., Inc., No. C 04-04825 JW, 2005 WL 756610 (N.D. Cal. Apr. 1, 2005) (circumstances created actual or imputed knowledge sufficient to bind user to Web site's terms and conditions).

Similarly, sufficient notice may exist if the evidence shows that the phrase alerting the user to the browsewrap agreement exists on every page of the Web site, and also that the user navigated through several pages of the site. Under such circumstances, one court has remarked that the Web site operator would be “highly likely to succeed in showing that [the] Defendant received notice of the Terms of Use and assented to them by actually using the [Web site].” Ticketmaster LLC v. RMG Techs., Inc. , 507 F. Supp. 2d 1096, 1107 (C.D. Cal. 2007). Again, however, additional factors such as the size, placement and conspicuous nature of the notifying statements appeared to influence the court's ruling.

Proving Exposure to the Agreement

A threshold question for the formation of a valid browsewrap agreement is whether the user adequately was exposed to the statement on the Web site purporting to create the agreement. A Web site operator should ensure it has the ability to prove the user actually accessed the site. In some instances, this is inherent in the nature of the site itself. For example, in a site that sells products online, evidence of a user's purchase on the site will suffice to show access. On the other hand, sites that simply provide information or entertainment may have no record of a particular user accessing the site and extracting information. Absent the use of cookies or some other method to document who visits the site, a Web site operator may be unable to prove assent to its terms of use. See, e.g., Fractional Villas, Inc. v. Tahoe Clubhouse, No. 08cv1396-IEG-POR, 2009 WL 465997 (S.D. Cal. Feb. 25, 2009) (failure to prove defendant visited the site precluded showing that defendant accepted forum selection clause in site's terms of use).

Avoiding a Finding of Insufficient Notice

The majority of browsewrap agreements share two common features to their format. First, the notice of the agreement itself is often “submerged” at the bottom of each page on a Web site in the midst of small, inconspicuous text. Second, the notice states that access to the site is governed by its terms of use (or similar language) and then provides a hyperlink to the terms.

Although sometimes viewed as an example of insufficient notice of a clickwrap agreement, Specht v. Netscape is frequently cited to illustrate the insufficiency of notice provided by this “standard” browsewrap format. (The fact that the agreement in Specht was deemed accepted upon the user's clicking a “Download” button, as opposed to simply “browsing” the site, leads some courts to view the agreement as a clickwrap. In this regard, Specht represents one of several cases that blurs the distinction between what technically constitutes a browsewrap agreement versus a clickwrap agreement.) Under the reasoning of Specht, a browsewrap agreement will not be enforced against a user if, under the circumstances, the Web site does “not make clear” to the user that browsing the site would signify assent to its terms. 306 F.3d at 30-31.

While a user has the ability to scroll to the bottom of a screen to observe notice of a browsewrap agreement, there is often no reason to assume the user would do so. Site operators that wish to utilize the browsewrap format should therefore employ a design that places notice of the agreement directly in front of the user upon accessing the site, or otherwise ensures that the user will scroll or navigate to a screen that conspicuously alerts the user to the existence of the agreement. Additionally, the text providing notice of the browsewrap agreement should be conspicuous and, at a minimum, should be distinguished from adjacent text by size, color, font or any combination thereof.

Further, the hyperlink to a browsewrap agreement should link directly to the terms and conditions that will be enforced against the user. Requiring the user to navigate through more than one page in order to access the applicable terms, or to select the correct terms from a list of potentially applicable agreements, may prevent enforcement of the agreement. See, Specht, 306 F.3d at 23-24.

Finally, the statement accompanying the hyperlink should be mandatory in tone and clearly indicate that use of the site constitutes acceptance of its terms and conditions. Permissive phrases or phrases merely “requesting” that the user review and accept the terms and conditions may not be sufficient to form binding agreements. Id.

Concluding Recommendations

The decision whether to use a clickwrap agreement or a browsewrap agreement reflects a balancing of the site operator's preference for an uninterrupted browsing experience against its tolerance for risk in enforcing the agreement against a user. Absent exceptional circumstances, clickwrap agreements usually will provide sufficient notice to bind the user, provided the user is informed that his or her action will constitute acceptance of the agreement's terms.

Browsewrap agreements, in contrast, are inherently less likely to be enforced, although steps can be taken to enhance the likelihood of enforcement. First, the site operator should ensure that it utilized appropriate technology to prove the user actually visited the Web site. Once that technology is in place, the site should be formatted to ensure the notice of the agreement and a link to its terms is within the user's plain view; Web site formats requiring users to scroll through pages to find the notice should be avoided. Furthermore, the notice itself should be sufficiently conspicuous to alert a reasonable person that it holds special significance, particularly if the terms of use include forum selection clauses, arbitration agreements, or other provisions that alter or limit the user's legal rights. Finally, the notice should provide a direct hyperlink to the applicable terms and conditions, and should employ words that unambiguously inform the user that accessing the site will bind the user to its terms.