Burr Alert: Is Arbitration Just a Click Away?
With online retailers challenging brick and mortar stores, the importance of online transactions and the terms of the contracts they create has never been greater. In the context of arbitration, courts are increasingly being faced with the question of what constitutes a binding agreement to arbitrate in the new online world. While new commerce on the internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract.1 One principle requirement that is as true on the internet as it is on paper is the requirement that a contract requires a, "….mutual manifestation of assent, whether by written or spoken word or by conduct…."2
This raises the question, what is the necessary assent to agree to arbitration in an online transaction? There are two types of basic agreements found in internet sales a "browse wrap" and "click wrap" agreement. A "click wrap" agreement occurs when a website directs a purchaser to the terms and conditions of the sale and requires the purchaser to click a box acknowledging that the purchaser has read those terms and conditions. The terms of a "click wrap" agreement have generally been found to be enforceable by the courts.3