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As online business expands and consumer-driven self-service workflows flourish, it has become increasingly important for companies to be able to enforce their terms in court. Companies are finding themselves in a position where they need to enforce an arbitration clause, forum selection clause, or class action waiver.
Failure to enforce these clauses can mean spending big money, but ensuring that the online contract acceptance process produces enforceable agreements can be difficult. Courts can be tricky, and best practices in online agreement presentation are constantly changing based on court application of the law. As a result, keeping up with the most recent court cases in the industry is important.
This month our legal team reviews cases from Amazon, Amtrak, HelloFresh, and more.
The court in Slaughter v. National Railroad Passenger Corporation recently declined to enforce Amtrak’s terms. Although the plaintiff had agreed to several different agreements through her use of Amtrak, the contract that governed the lawsuit did not contain the clause Amtrak sought to enforce. Even though she had agreed to other terms that did contain the clause, the court declined to enforce the clause in this case.
HelloFresh was recently unable to enforce their terms in Murray v. Grocery Delivery E-Services USA Inc. Although HelloFresh had users accept their terms via clickwrap, they did not similarly require acceptance for modifications to the terms. The clause HelloFresh sought to enforce in this case did not appear in the original terms, and instead was part of a later modification. Because HelloFresh did not require users to accept modifications, nor did it send a separate and distinct email to users alerting them that the terms had changed, HelloFresh could not enforce the contract clause contained in the modified terms against the plaintiff.
In the most recent Nicosia v. Amazon decision, the court enforced Amazon's terms. This case has been ongoing for the better part of a decade, and in the latest development, the court decided to enforce Amazon's terms. This decision was made primarily based on the fact that the plaintiff became aware of the arbitration clause through the course of the litigation and continued to make purchases on Amazon.com. So even though the plaintiff likely didn't have notice of the terms at the time the suit was originally filed, his subsequent use of the website led the court to conclude that he now has notice and must be bound to the terms.
Ticketmaster recently enforced their terms in Lee v. Ticketmaster. Ticketmaster alerted users that by “continuing past this page” and by clicking the “Place Order” button, they are agreeing to the terms. The court explained that this way of presenting the terms wasn’t a browsewrap “because they are not merely posted on Ticketmaster’s website at the bottom of the screen.” The terms presentation was not a true clickwrap either, because there was no “I agree” button or checkbox. But the court found that this presentation of the online terms “provided sufficient notice for constructive assent, and therefore, there was a binding arbitration agreement between” the parties.
The court in Hidalgo v. Amateur Athletic Union recently enforced Amateur Athletic Union’s terms. The plaintiff in this case tried to argue that he wasn't put on reasonable notice of the terms because he had a hard time viewing the screen and had to pinch to zoom and scroll multiple screen lengths when signing up for a membership to see the terms. The court disagreed, reasoning that the screen was uncluttered, the text stood out against the background, the notice and the terms were spatially located, and "the fact that an applicant would have to scroll down through many pages of the application to reach the terms and conditions box does not undermine the plaintiff's assent to those terms and conditions." As a result, the court sided with the Amateur Athletic Union.
The court recently declined to enforce GreenSky's terms in Belyea v. GreenSky. GreenSky alerted users in the terms that use of GreenSky loans constituted assent to the corresponding terms. GreenSky did not require any explicit act of consent from users. The court found this setup was "more akin to a browsewrap agreement because there is no suggestion that Plaintiff had to affirmatively click something in order to accept the contract." Because browsewraps require no affirmative action, as was the case here, they tend to not give users inquiry notice of the terms. The court found that users in this case lacked inquiry notice, therefore no agreement existed and the contract was unenforceable.
Stay tuned next month to get your online contract acceptance 'case' studies from the PactSafe Legal Team.
Update: We have released the 2021 report of clickwrap litigation trends with more up to date best practices and case rulings from the last year. Our Clickwrap Litigation Trends: 2021 Report also analyzes the impact of the pandemic and the boon of eCommerce on the trends we see. Download your copy!