Many websites use browsewrap terms of use agreements, which say that by virtue of using or making a purchase on the website, the user agrees to those terms of use.  However, the 9th Circuit’s recent opinion raises questions about the enforceability of those agreements.

On August 18, 2014, the 9th Circuit Court of Appeals affirmed the unenforceability of Barnes & Nobel’s (“B&N”) browsewrap website terms of use agreement.  In Nguyen v. Barnes & Nobel, Inc., 2014 U.S. App. LEXIS 15868 (9th Cir. August 18, 2014), the plaintiff had placed an online order for B&N’s discounted tablets that B&N later cancelled.  Nguyen brought a suit against B&N, claiming that as a result of B&N’s representation and the delay in informing him that B&N would not honor the sale, Nguyen was forced to purchase a higher priced tablet instead.

B&N moved to compel arbitration, arguing that Nguyen was bound by the arbitration agreement in B&N’s website terms of use.  The B&N’s website terms of use was available as a hyperlink at the bottom left-hand corner of every page on the B&N’s website in the online check out process, underlined and set in green typeface and was presented on the user’s screen without the need to scroll down.  Nguyen claimed that he was not aware of the existence of the terms of use, so he had not agreed to them, and the court agreed.  The court found no evidence that Nguyen had actual notice of the terms of use, nor was Nguyen required to affirmatively acknowledge the terms of use before making his online purchase.  As a result, the court held that the website did not put a reasonably prudent person on notice of the existence of the terms of the agreement.

In light of Nguyen, whenever possible, we advise that you require the user to agree to a click-through terms of use agreement, particularly if the website is targeted at consumers.  If that is not practicable, it is possible to form a binding agreement if the design and the content of the website make the terms of use link conspicuous prominently on the page where a reasonable user is certain to see it and be on notice.  But the question remains if a green and underlined hyperlink that appears on every page without needing the user to scroll down didn’t work, what will?