Cases and Litigation

'Case' Studies: January Online Contract Acceptance Case Reviews

How Legal can Take Advantage of Clickwrap-13

The need for businesses to enforce their terms (e.g., arbitration clauses, forum selection clauses, class action waivers) in court is steadily increasing following us into 2021. Failure to enforce the terms can cost a lot of time and money. 

But courts don't make the process of terms enforcement easy. Best practices in online agreement presentation are constantly changing. As a result, businesses need to keep up with developments in case law and adjust their practices accordingly.

Keeping up with case law can be a time consuming process for legal teams (we know from experience). Let us help. The PactSafe Legal team compiles and summarizes the most important cases into a monthly newsletter. Check out the recent cases from Carrington Mortgage Services, Ticketmaster, Massage Envy, and StockX below.

1. Alexander v. Carrington Mortgage Services, LLC

Carrington Mortgage Services recently enforced their terms in court. Consumers were unhappy with the $5 service fee that came with paying their mortgage payments online. Carrington Mortgage argued that consumers agreed to the $5 fee each time they paid online, as the webpage users encountered stated that "There is a $5 convenience fee when making one-time payments online," followed by an "I agree" button consumers had to click in order to proceed with the transaction. The court found that this layout reasonably communicated to users that they agreed "to pay a $5 convenience fee."

2. Hansen v. Ticketmaster Entertainment, Inc.

Ticketmaster recently enforced their terms in court. Each time consumers signed into their Ticketmaster accounts, Ticketmaster notified them that "By continuing past [the sign-in] page, you agree to the Terms of Use." The words "Terms of Use" were hyperlinked and in the typical blue font. The plaintiff tried to argue that "less than 1 percent" of consumers actually click the link, and that the agreement language, “by continuing past this screen,” was inconsistent with the corresponding button “sign-in.” But the court found that this agreement presentation, which was a sign-in-wrap, put users on constructive notice of the terms. As a result, the court enforced Ticketmaster's terms.

3. Doe v. Massage Envy Franchising, LLC

Massage Envy recently enforced their terms in court. Massage Envy required customers to agree to their terms of use when creating an online profile by clicking a checkbox next to the sentence: "I agree and assent to the Terms of Use Agreement." The plaintiff argued that the agreement constituted an "impermissible browsewrap agreement" because she was not required to read the contents of the agreement prior to agreeing. But the court disagreed, noting that "plaintiff was required to check a box to manifest her assent." The court further stated that failure to read the terms does not negate the fact that a valid contract was formed. As a result, the court enforced Massage Envy's terms.

4. In re StockX Customer Data Security Breach Litigation

StockX recently enforced their terms in court. StockX required users to agree to their terms when first signing up for an account by checking a box next to the language: "By signing up, you agree to the Terms of Service and Privacy Policy." Additionally, StockX notified users each time they logged into their account that "By logging in, you agree to the Terms of Service and Privacy Policy." The court found this combination of a clickwrap at account registration plus a sign-in-wrap at each login formed a valid agreement. Furthermore, the plaintiffs didn't challenge contract formation. As a result, the court enforced StockX's terms.

Stay tuned for the February 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.

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