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Businesses are increasingly going through the process of needing to enforce their terms (e.g., arbitration clauses, forum selection clauses, class action waivers) in court. It’s more important than ever because failure to do this can cost a lot of time and money.
As you may know, courts don't exactly make this process easy with best practices in online agreement presentation constantly changing. As a result, businesses need to keep up with developments in case law and adjust their practices accordingly.
We know that this is a time consuming process for legal teams. To help save time, our PactSafe legal team compiles and summarizes the most important cases into a monthly newsletter.
Review this month’s recent cases involving TTAC Publishing, Wyze, Airbnb, and Skillz, Inc. below.
TTAC Publishing was recently unable to enforce their terms in court. TTAC included a checkbox on the checkout screen next to language "I agree to the terms and conditions." However, the checkbox was pre-selected by default, therefore consumers were not required to click it. As a result, the court considered this agreement presentation to be a hybrid between clickwrap and browsewrap. The court focused their analysis on TTAC's screen "design, ultimately concluding that the design and content of the checkout process distracts users from recognizing the existence of, and need to review, the Terms and Conditions." The court therefore declined to enforce TTAC's terms.
Wyze recently enforced their terms in court. Consumers purchased Wyze products, and then registered for a Wyze account to activate the products online. Wyze required consumers to agree to their terms via clickwrap when signing up for an account. The consumers argued that the agreement was unenforceable because they were required to agree to terms after already purchasing the product. The court disagreed with the consumers, noting that "the court does not view the time period between purchase and notice [of the terms] as legally significant." The court found that Wyze's process for online registration created a valid agreement, and the court enforced their terms as a result.
Airbnb recently enforced their terms in court. Airbnb required users to agree to the terms when signing up for an account by clicking a button to indicate acceptance. Airbnb also used this method to have users agree to modifications of the terms. The terms appeared either in a scrollbox or via a hyperlink. The court called this agreement presentation a classic example of a clickwrap, "wherein a website user is provided notice and an opportunity to review terms of service prior to acceptance via a hyperlink to the terms of service." As a result, the court enforced Airbnb's terms.
Stay tuned next month to get your online contract acceptance 'case' studies from the PactSafe Legal Team.
Want more now? Take a look at the Aragon Research Note announcing the Clickthrough Transaction Platform Category.