A California Court of Appeal has taken its first stance on the website design requirements necessary for an enforceable browsewrap agreement. On March 17, 2016 the Court of Appeal affirmed the California Superior Court of Los Angeles County’s denial of a petition to compel an arbitration clause in what is commonly referred to as a “browsewrap” agreement.  A browsewrap agreement is a set of terms for using a website that does not require users to click a button confirming their assent.  Instead, a user’s assent to the terms of use is assumed by his or her continued use of the website.

In this case, the Court of Appeal determined that the hyperlinks to ProFlowers.com’s Terms of Use and the overall design of the website would not put a reasonably prudent Internet user on notice of the terms, and that the Plaintiff did not unambiguously assent to the arbitration provision simply by placing an order on the website. Thus, the terms were not binding, and arbitration could not be compelled.  SeeLong v. Provide Commerce, Inc., No. B257910 (Cal. Ct. App. Mar. 17, 2016) (“Long”).

What is the Root Concern with “Browsewrap” Agreements?

Browsewrap agreements are common in online retailing as a tool to reduce the transaction time required for online purchases while simultaneously providing the user with information about the terms of the sale. Because a user may not actually read a browsewrap agreement, the validity of a browsewrap agreement turns on whether, in using the website, the user should have known that she was agreeing to a contract about her use of the website.  

The Facts Bloom Before the Court

Defendant Provide Commerce, Inc. operates the floral arrangement website, ProFlowers.com, where Plaintiff Brett Long purchased a flower arrangement that he contends was different than advertised. Long then filed a consumer fraud class action lawsuit against Provide Commerce. Provide Commerce petitioned to compel arbitration on the basis of an arbitration provision in the company’s browsewrap agreement on the ProFlowers.com website. The browsewrap agreement was viewable to consumers by clicking a hyperlink entitled “Terms of Use” that was displayed at the bottom of each page of the website. Long alleged that he was not bound by the provisions of the ProFlowers.com Terms of Use, because he was never prompted to agree to them, and he did not actually read the terms before placing his order on the website.

The Superior Court denied Provide Commerce’s petition to compel arbitration, and the Court of Appeal affirmed. Specifically, the Court of Appeal held that a mere hyperlink to a website’s “Terms of Use” is not sufficiently conspicuous to provide the consumer with notice of the terms.

How in Carnation to Enforce Arbitration Clauses in Browsewrap Agreements

In the absence of guidance from a California state court on what sort of website design elements are required for an enforceable browsewrap agreement, the Court of Appeal turned to the Second and Ninth Circuit Courts of Appeals, each of which had considered browsewrap enforceability under California law. See generally Specht v. Netscape Communs. Corp., 306 F.3d 17, 30 (2d Cir. 2002); Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014). The Specht court required that the website make “a reasonably prudent offeree in plaintiffs’ position” aware of the terms of use. Specht, 306 F.3d at 35. The Nguyen court held that conspicuous links to terms of use, even on every page, was not enough where the website “otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent… .” Ngyuen, 763 F.3d at 1178–79.

Examining the ProFlowers.com website, the Court of Appeal determined that “the Terms of Use hyperlinks—their placement, color, size and other qualities relative to the ProFlowers.com website’s overall design—are simply too inconspicuous” to give rise to constructive notice of the terms for a reasonably prudent Internet user. Long, No. B257910 at *12. To discover the terms, users of ProFlowers.com had to turn their attention away from the normal use of the website and actively search for a “TERMS OF USE” hyperlink situated between other similarly formatted hyperlinks, which were colored in a light green typeface that could blend with the site’s lime green background. See id. at *12–13.

While the inconspicuous nature of the hyperlinks resolved the matter, the Court of Appeal went on to express its agreement with Nguyen that “to establish the enforceability of a browsewrap agreement, a textual notice should be required to advise consumers that continued use of a website will constitute the consumer’s agreement to be bound by the website’s terms of use.” Id. at *13 (citing Ngyuen at 1178–79). A mere conspicuous use of a “Terms of Use” hyperlink “may not be enough to alert a reasonably prudent Internet consumer to click the hyperlink.” Id. at *13–14.

A Thorn in the Side of Online Retailers: The Limiting Effects of Long on Browsewrap Agreements

This decision serves as a reminder to online retailers that they should be clear with consumers when seeking to create enforceable browsewrap agreements—especially with arbitration clauses. While browsewrap agreements have greatly reduced barriers to transaction in the online marketplace, the law is developing to protect the widest range of consumers possible. And although some purchasers of online goods may be able to understand that they are agreeing to the terms in browsewrap agreements, the Court of Appeal now warns that it will seek to protect even the least savvy shopper from being bound to terms that they were not aware existed. Going forward, online retailers should heed the Court of Appeal’s call to provide conspicuous disclosure of both the hyperlinks to their browsewrap agreements and the textual notice indicating their intent to bind users to their browsewrap agreements.