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Does “I agree” really mean “I agree”?

Considerations for user consent to website terms and conditions

By Patrick Monahan
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Companies designing or redesigning their websites may face uncertainty about the manner in which their terms & conditions should be presented to be considered enforceable in the event a user violates them. A recent decision in the United States District Court for the Eastern District of New York, applying a recently-established test for enforceability, may prove instructive in this regard.

 

In Adwar Casting Co., Ltd. v. Star Gems Inc. et al, 2018 WL 5084826 (E.D.N.Y. October 18, 2018), Civil Action No. 2:17-cv-06278-DRH-SIL, the Plaintiff (“Adwar”) accused Defendant Star Gems Inc. and its CEO Anish Desai (collectively, “Defendants”) of infringing Adwar’s copyrighted jewelry designs, images of which were posted to Adwar’s website. Defendants moved to dismiss the complaint, claiming the Court lacked personal jurisdiction over Defendants. One of the issues the court considered in deciding the motion was whether Defendants had consented to jurisdiction in New York federal court by acceptance of the terms and conditions on Adwar’s website, which were accessible using links located at the bottom of each page, purported to confer “exclusive jurisdiction of federal and/or state court located in New York to enforce this Agreement or for any other purpose in connection with this website.” Adwar at *6.

The Court reviewed the categories of electronic adhesion contracts examined by the courts and the four-part enforceability test detailed in a prior decision in the same district, Berkson v. Gogo LLC, 97 F.Supp.3d 359 (E.D.N.Y. 2015).

Types of Electronic Adhesion Contracts

  • 1. Browsewrap

Browsewrap refers to situations in which the website contains a notice that the user agrees to the site’s terms and conditions just by using the site, without any affirmative consent. Berkson at 395. These types of agreements are typically only enforced against “knowledgeable accessors”, such as corporations, and not against individuals. Id. at 396.

  • 2. Clickwrap

Clickwrap agreements “require a user to affirmatively click a box on the website acknowledging awareness of and agreement to the terms of service before he or she is allowed to proceed with further utilization of the website.” Berkson at 397 (internal citations omitted). Clickwrap agreements have generally been found enforceable when challenged. Id.

  • 3. Scrollwrap

Scrollwrap agreements are similar to clickwrap agreements in that they require the user to affirmatively acknowledge and agree to the terms and conditions of the site before permitting further use, but they go further in that they require the user to physically scroll through those terms and conditions before they are permitted to click the button or checkbox indicating agreement. Berkson at 398-99. These agreements have also traditionally been enforced.

  • 4. Sign-in Wrap

Sign-in wrap agreements notify the user of a site of the existence and applicability of that site’s terms of use as they proceed through the site’s sign-in or login process. Berkson at 399. These agreements have typically been enforced when a court determines the user had sufficient notice and access to the terms of use. Id. at 401-02.

Enforceability of Electronic Adhesion Contracts

If your company is considering how users should be required to accept your terms and conditions, the following questions should be considered:

    • – Aside from clicking the equivalent of sign-in (e.g., log-in, buy-now, purchase, etc.), will the user be aware that she was binding herself to more than an offer of services or goods in exchange for money?
    • – Does the design and content of the website, including the homepage, make the “terms of use” (i.e., the contract details) readily and obviously available to the user?
    • – Are important details of the contract obscured or minimized by the process of agreement required for a consumer to purchase or subscribe to a service or product? Or are they highlighted or otherwise featured, such as by boldface type?
    • – Do you clearly draw the consumer’s attention to material terms that would alter what a reasonable consumer would normally understand to be her rights in an online transaction? These rights may vary from state to state, but might include the rights to (a) not have a payment source charged without notice (i.e., automatic payment renewal); (b) bring a civil consumer protection action; and (c) participate in a class or collective action.

Berkson at 402.

In the Adwar case, the court determined that Adwar’s terms and conditions, accessible only if one clicked the links located at the bottom of each page, were browsewrap, because they did not require any act of affirmative assent from site visitors. In light of this classification, the Court further determined that because the user’s attention was not drawn to the jurisdiction consent provision, either by a font change, or a mechanism such as “***”, it could not be enforced against the Defendants. Adwar at *6.

This decision highlights the importance of giving the user sufficient notice of the terms, particularly terms that may affect their rights, such as consent to jurisdiction. When designing a website, service providers should consider including some form of affirmative assent, whether clickwrap, scrollwrap or sign-in wrap. The provider should also keep records of the user’s agreement if possible. Providers should also consider bolding or highlighting key provisions of their sites’ terms of use, including clauses relating to: mandatory arbitration; class actions; damages; and jurisdiction.

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