Formation and Enforcement of Online Contracts
How frequently do you make purchases or conduct other business online? If you are like the majority of people in the 21st Century, the answer is “all the time.”
There are several types of online agreements. Clickwrap agreements are agreements where users click “I agree” to accept the terms. Scrollwrap agreements are those where users must scroll to the end of the document prior to being able to click on “I agree” to accept the terms. Clickwrap and scrollwrap agreements are routinely enforced by courts, as long as they are presented to the consumer in a format where it is clear that by clicking “I agree,” it means agreement to the subject contract. Browsewrap agreements are agreements where users agree to the terms simply by using the website. There is no box for consumers to check to indicate consent. Instead, consent is implied based on the circumstances. Browsewrap agreements are closely scrutinized by courts and not routinely enforced.
The case of Meyer v. Uber Technologies, 868 F.3d 66 (2d Cir. 2017), demonstrates the elements of an enforceable clickwrap agreement. In that matter, the court enforced Uber’s Terms of Service, explaining that notice of the Terms of Service were reasonably conspicuous to consumers, and manifestation of assent was unambiguous. The court explained that while the reasonableness of notice is a fact-intensive inquiry, a court nevertheless may determine that inquiry notice has been established as a matter of law in certain circumstances. The Court described the presentation of an enforceable clickwrap agreement:
Meyer, 868 F.3d at 69-71. The court was describing with approval the following image of the screen:
Id. This successful enforcement of a clickwrap agreement contrasts to the unsuccessful enforcement of browsewrap agreements many cases.
Certain best practices emerge to light in the context of the above cases and other similar cases:
- Use clickwrap agreements, instead of relying on general browsewrap agreements;
These factors should be considered when designing a website that seeks to create enforceable contracts with consumers and others who may interact with the site.
Please contact Elizabeth Shirley and others on Burr & Forman’s Cybersecurity & Data Privacy team for consultation and recommendations with these issues, as well as all of your cybersecurity, data privacy, and other related areas.