“TERMS OF USE” MUST BE CONSPICUOUSLY DISPLAYED ON WEBSITE TO BE ENFORCEABLE.

California law is now clear that so-called “browsewrap” agreements on internet sites that are inconspicuous to the user are not contractually binding.  In Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, the plaintiff Long brought a consumer fraud claim against Provide Commerce, Inc. based on allegations of fraud with respect to the products sold on Provide’s website, ProFlowers.com.  Provide sought to compel arbitration of the claim based on a provision contained in the company’s “Terms of Use,” which were viewable via a hyperlink displayed at the bottom of each page on the ProFlowers.com website.

The court explained that the Terms of Use on ProFlowers.com fall into a category of internet contracts commonly referred to as “browsewrap” agreements.  Unlike another common form of internet contracts – known as “clickwrap” agreements – browsewrap agreements do not require users to affirmatively click a button to confirm their assent to the agreement’s terms; instead, a user’s assent is inferred from his or her use of the website.  Because assent must be inferred, the determination of whether a binding browsewrap agreement has been formed depends on whether the user had actual or constructive knowledge of the website’s terms and conditions.  

In the Long case, ProFlowers’ “TERMS OF USE” was posted on the website via a hyperlink at the bottom of each page.  The Terms of Use contained an arbitration provision and the plaintiff claimed that he did not notice any reference of any kind to ProFlowers’ terms and conditions nor a hyperlink to ProFlowers’ Terms of Use.  Plaintiff argued that he was not bound by the arbitration provision because he neither had notice or assented to the Terms of Use.

The court found that the validity of a browsewrap agreement turns on whether the website puts a reasonably prudent user on inquiry notice of the terms of the contract.

The court noted that Provide did not dispute plaintiff’s testimony that he had no actual knowledge of the Terms of Use when he placed his order on ProFlowers.com.  With respect to constructive knowledge (should have known), the court held that the terms of use hyperlinks were not sufficiently conspicuous to put a reasonably prudent internet consumer on inquiry notice.  The court pointed out that the Terms of Use hyperlinks – their placement, color, size and other qualities relative to the ProFlowers.com website’s overall design – were simply too inconspicuous to put the user on inquiry notice of the terms of the contract.  The court explained that the screenshots produced by Provide as evidence in the case revealed how difficult it was to find the Terms of Use hyperlinks in the checkout flow even when one was looking for them.  The court stated that the subject hyperlinks in the checkout flow were not located next to the fields and buttons a consumer must interact with to complete his or her order.  Those fields and buttons were contained in a separate bright white box in the center of the page that contrasted sharply with the website’s lime green background.   The court also emphasized that the subject hyperlink was located away from the order check-out section and buried at the bottom of the page next to another hyperlink where it blended in with the website’s green background.  The court also warned that in addition to placing the Terms of Use policy prominently and conspicuously on the website for the user to observe, online retailers would be well-advised to additionally include a conspicuous textual notice that the linked page contains binding contractual terms.

The Long ruling is important in this day and age where so much retail commerce is conducted online.  The message from Long is clear:  If online internet retailers or other businesses want to ensure binding contractual terms and conditions as part of the sale of their products or use of their website, the terms must be conspicuous and must also include notice that the user is entering into binding contractual terms.

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