Is Clicking “I Agree” Needed To Bind A Website User To Your Terms Of Use?

  • By:Larry Silverman
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3/29/2016

As I have highlighted in earlier posts — “Are Your Website Terms & Conditions and Privacy Policy Compliant?” and “Why Does My Website Need Terms of Use and a Privacy Policy?,” “Terms of Use” on a company or non-profit’s website are designed to form a legally binding contract between the user of the site and the company or non-profit. One of the threshold questions clients often ask is whether they need to affirmatively secure the user’s agreement to those “Terms” in order for some or all of the provisions to be legally binding. While the law in many jurisdictions remains unclear, the Court of Appeals for the Ninth Circuit, and more recently the state courts in California, have weighed in on this issue, holding that unless the user affirmatively agrees to the “Terms” they will not be enforceable.

In Long v. Provide Commerce, Inc., ___ Cal. Rptr. 3d ___, 2016 WL 105655 (March 17, 2016), the California Court of Appeals affirmed the decision of a lower court which had refused to compel arbitration of consumer fraud claims, reasoning that an agreement to arbitrate contained in “Terms of Use” accessible through a hyperlink at the bottom of each web page was not sufficient to create a legally binding agreement between the user and the company. The Court, drawing heavily from the holding of the Ninth Circuit in Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014), held that the “Terms of Use” hyperlink alone on the www.proflowers.com website was not enough to put consumers on notice that, by using the site, they had consented to be bound by arbitration.

It is well established that contracts formed on the internet fall into two categories: (1) “clickwrap” or “click-through” agreements in which the website user must click on an “I Agree” box after being presented with the terms and conditions of use; and (2) “browsewrap” agreements, where the website’s terms and conditions of use are posted on the website via a hyperlink at the bottom of the screen. The key difference between the two is that, unlike clickwrap agreements, a browsewrap agreement does not require users to expressly or affirmatively agree to the website’s “Terms of Use”; rather, such agreements state that the user is manifesting his/her agreement by using the site.

The Long court concluded that Nguyen had adopted a bright line rule for determining the validity of browsewrap agreements. As the court stated:

[W]here a website makes its terms of use available via a conspicuous hyperlink on each page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice [of the terms of the contract].

The issue in Long was whether Provide Commerce, Inc., the operator of www.proflowers.com, could compel a consumer to arbitrate his consumer fraud claims based on a browsewrap agreement located at the bottom of each proflowers web page. The agreement came in the form of a hyperlink to the full text of the site’s “Terms of Use,” which included an agreement to arbitrate disputes. The court held that the agreement to arbitrate would not be enforced because the hyperlink alone was insufficient to create an enforceable agreement. The court reasoned that a hyperlink, even if prominently displayed, would not be enforceable if it failed to notify users that the linked page contained binding contractual terms, because such a hyperlink would have little or no meaning to a large segment of the Internet-using public.

The Long decision puts companies doing business with California consumers (which is almost certain to be most companies and non-profits doing business on the internet) on notice that including a hyperlink to its site’s “Terms of Use” is not enough to create a binding agreement with users. If, like www.proflowers.com, your site relies exclusively on hyperlinks to direct consumers to the site’s “Terms of Use,” you should consider reconfiguring the site so that users are required to expressly agree to be bound by the site’s “Terms of Use.” Otherwise, provisions in those “Terms” such as liability disclaimers and arbitration/class action waivers may not be enforceable.

Posted in: Online Commerce