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In the latest Aragon Research Note, The Rise of Clickwrap Transaction Platforms, they state, "With remote work, there has come a surge in demand for online transactions. Up until recently, the task of managing terms and conditions was ad hoc and unsystematic. In this truly digital economy, enterprises and governments will need ways to ensure that the right terms and conditions are presented for the right products and to the right buyers."
Companies are finding that the need to enforce their terms (e.g., arbitration clauses, forum selection clauses, class action waivers) is more important than ever. Failure to do this can cost a lot of time and money.
Courts don't make this process easy, as best practices in online agreement presentation are constantly evolving. As a result, companies need to keep up with developments in case law and adjust their practices accordingly.
We know (from experience) that legal teams don't always have the time to do this. So, our PactSafe legal team compiles and summarizes the most important cases into a monthly newsletter.
This month we review cases involving Shutterfly, Uber, Walmart, Airbnb, and Eventbrite.
Shutterfly recently enforced their terms in court. They used a sign-in-wrap to notify users of the terms. Each time users placed an order online, Shutterfly alerted users that by clicking the "submit order" button, the users agree to the terms. Additionally, Shutterfly included a link to the terms on the bottom of each webpage. The court found that this design put users on constructive notice of the terms.
Uber recently enforced their terms in court. Uber used a clickwrap agreement, requiring prospective Uber drivers to click a button labeled “Yes, I agree” to the terms when signing up to drive for Uber. Uber additionally required drivers to confirm their agreement during the sign-up process. The plaintiff in this case tried to argue that his status as an employee of Uber engaged in interstate commerce exempted him from the specific provision in the terms Uber sought to enforce against him. The court disagreed, finding a valid agreement and no exemption. As a result, the court enforced Uber’s terms.
Walmart recently enforced their terms in court. Walmart alerted online consumers that by placing an order, they agree to Walmart’s terms. This language was temporally located next to the corresponding button. The court found that the design of the screen, as well as the requirement to click the button to place an order, was enough to notify users of the existence of the terms and that they were agreeing to them. As a result, the court enforced Walmart’s terms.
Airbnb recently enforced their terms in court. Airbnb required users to agree to the terms via clickwrap when signing up for an Airbnb account. Airbnb was able to show that the user in question in this case actually agreed to the terms at least 11 times. The court found that this agreement presentation afforded users plenty of opportunity to review the terms prior to agreeing and enforced the terms as a result.
Eventbrite was recently unable to enforce their terms in court. Eventbrite notified users via sign-in-wrap that they agreed to Eventbrite’s terms by signing up for an Eventbrite account, and again by making purchases on the site. However, Eventbrite was unable to provide the court with the exact versions of the terms consumers agreed to during the relevant time period, and Eventbrite wasn’t able to show the court the exact screen that consumers saw. Instead, Eventbrite offered screenshots of the current screen design as it stands today, as well as different versions of the terms that were not in effect during the relevant time period. The court also pointed out that some of Eventbrite’s evidence was contradictory and potentially misleading. Because Eventbrite wasn’t able to show the court the exact screen consumers saw nor the exact version of the terms consumers allegedly agreed to during the relevant time period, the court declined to enforce Eventbrite’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.