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Forming Contracts in San Diego: Browsewrap vs. Clickwrap
Everyone who spends any time on the internet has encountered terms of service/user agreements that go by the names of “browsewrap” and “clickwrap” agreements. A classic “browsewrap” agreement is a statement located on a website that says something like: “By visiting this website, you agree to the Terms of Service Agreement.” Generally, a hyperlink is provided to the terms of service (“TOS”) agreement. By contrast, a “clickwrap” agreement requires that the user affirmatively click on a box or take other action that signifies that the user has gone to the Terms of Service agreement. Sometimes, the user must then scroll down the Terms of Service agreement, at which point, the box for clicking agreement becomes activated (the box will not “activate” until the user has scrolled to the bottom of the agreement).
Under California law, a “browsewrap” agreement is difficult to enforce; whereas a “clickwrap” agreement is almost certain to be enforced. The legal issue is one of contract formation — did the parties actually affirmatively agree to make/form a contract? This article discusses some of the legal issues. If you are running a website, a good San Diego corporate attorney can provide advice and counsel to help ensure your Terms of Service agreement is enforceable.
San Diego Corporate Law: Contract Formation Legal Principles
In general, for a contract to come into existence — and, therefore, be enforceable — there must be an agreement. Under California legal principles, for there to be “agreement” there must be some “manifestation of assent, whether by written or spoken word or by conduct. See Long v. Provide Commerce, Inc., 245 Cal. App. 4th 855 (Cal. App. 2nd Dist. 2016).
Under this principle, a person cannot be said to consent to terms of a contract that are inconspicuous or buried in footnotes or tiny print or otherwise obscured, particularly where the contract is not subject to negotiations, changes, and review by attorneys.
The advent of the internet has not changed this legal principle. Thus, as noted above, because “clickwrap” agreements require an affirmative “click” or other action, California courts deem the Terms of Service agreements formed via the “click” to be enforceable.
On the other hand, “browsewrap” agreements are more problematic. One initial problem is that, commonly, many browsewrap agreements use the phrasing “by visiting this website …” However, of course, the user has already visited the page and, thus, it is difficult to claim that “visiting” the page is a form of agreement. (It is better to use the phrase “by continuing to use this website …”).
Secondly, even “continuing to use this website ….” does not resolve the issue of a knowing consent by the user, particularly if phrasing and the hyperlink to the Terms of Service agreement are not conspicuous. This was the holding of the case of Long v. Provide Commerce, Inc., 245 Cal. App. 4th 855 (2nd Dist. 2016). In that case, the court held that the browsewrap Terms of Service agreement was not good enough to bind the users of the website at issue to the mandatory arbitration clause. While hyperlinks to the agreement were provided at several places and on several pages, the court was not persuaded because the links, button, and fields were:
- Not prominent in size, font, and location
- Not proximate to other links, buttons, and fields where the consumer interacted with the website to complete his/her order
- Not designed in font and color scheme to stand out whereas purchase and “checkout” links, buttons, and fields used color schemes that “caught the eye” — the hyperlinks to the Terms of Service agreement used color schemes and fonts that made them to blend into the background
- Not accessible without the need to scroll down past the initial screen
The legal lesson is twofold: Standard principles of contract law apply with equal force to agreements made via the internet; evidence of consent is necessary before California courts will enforce contracts.
Contact San Diego Corporate Law
For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard focuses his practice on business law, transactional, and corporate matters, and he proudly provides legal services to business owners in San Diego and the surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email.
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