Good website and app design is not just about aesthetic preference. The typography, layout, and user experience of your website and app can determine whether your terms of use and privacy policy are enforceable.
What is a “Wrap” Agreement?
Online agreements are often referred to as click-wrap or browse-wrap agreements. The “-wrap” part of their names is a throwback to shrink-wrap agreements. Shrink-wrap agreements are software licenses that are hidden inside a shrink-wrapped box. How can a customer be bound to an agreement they cannot see at the time of purchase? In general terms, a shrink-wrap agreement is enforceable if the buyer had an opportunity to review the terms of the agreement before deciding whether to use the software and the terms of the agreement are not otherwise objectionable “on grounds applicable to contracts in general” (e.g., if the agreement contains an unconscionable term). ProCD, Inc., v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996).
Courts have applied the ideas from shrink-wrap agreement cases to so-called click-wrap and browse-wrap agreements that appear on websites, rather than in a product’s physical packaging. Click-wrap agreements are entered into by clicking a button or checking a box to manifest assent to the terms of an agreement. Browse-wrap agreements are entered into by browsing a website after having the opportunity to read the terms of use for that website.
Are “-Wrap” Agreements Enforceable?
If done properly, yes. Although there are few cases exploring the enforceability of click-wrap agreements (browse-wrap agreements are discussed below), the prevailing view is that click-wrap agreements will be upheld if users are given reasonable notice of the terms of the agreement and manifest their assent to the agreement. Feldman v. Google, Inc., 513 F.Supp.2d 229, 236 (E.D. Pa. 2007). A big takeaway from Feldman is that the enforceability of online contracts relies on basic contract principles (i.e., whether the user knew the terms of the agreement and whether the user manifested their assent to the terms of the agreement). In Feldman, the user was required to create an account by visiting a website that immediately displayed a scrollable text box containing the agreement with a “prominent admonition in boldface to read the terms and conditions carefully.” Id. at 237. The agreement was not hidden at the bottom of the page or behind a series of hyperlinks. The user was then required to take “affirmative action and click the ‘Yes, I agree to the above terms and conditions’ button” in order to proceed in the registration process. Id. at 237. The court upheld Google’s agreement because the user was given reasonable notice of the agreement and the user manifested his assent to its terms with the click-through mechanism.
Google’s success in Feldman is contrasted with Netscape’s failure in a 2002 case from New York. Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. N.Y. 2002). In Specht, the court refused to uphold an arbitration provision contained in an agreement that was hidden behind a hyperlink that appeared in a “submerged” part of Netscape’s website. The agreement said that when the user clicked a download icon on the Netscape’s website it was entering into the hyperlinked software license. The court found that the user did not have reasonable notice of the terms of the agreement when it clicked the download icon. The mechanism that Netscape was attempting to use to manifest the user’s assent to the agreement (i.e., the clicking of the download icon) was not physically close enough or related enough to the terms of the agreement for the clicking to actually manifest the user’s assent. The Specht case can be viewed as both a browse-wrap and click-wrap case due to the download icon’s lack of proximity to the related agreement.
Browse-wrap agreements are looked at with more skepticism than click-wrap agreements. If a user visits a website or loads a mobile app but is not required to affirmatively accept the applicable terms of service, how can a company bind the user to those terms of service? Courts generally look to whether a user has “actual or constructive knowledge of a website’s terms and conditions.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1176 (9th Cir. 2014)(quoting Van Tassell v. United Mktg. Grp., LLC, 795 F.Supp.2d. 770, 790 (N.D. Ill. 2011)). If the user did not have actual knowledge about the browse-wrap agreement, courts will next look to whether the design of the website to which the agreement applies would put a “reasonably prudent user on inquiry notice of the terms of the contract.” Nguyen at 1177 (citing Specht, 306 F.3d at 30-31). In Nguyen, the court found that the design of Barnes & Noble’s website was such that a reasonably prudent user would not be on inquiry notice of the terms of use that were hyperlinked on the website, despite appearing on every page the user viewed and even being in close proximity to the buttons the user had to click to checkout and complete a purchase. The analysis of whether a user has constructive notice of a browse-wrap agreement and its terms takes into account the visual design, typography, and user experience of the website. Is the link to the agreement in a jumble of 15 other links? Is it in 8 point light gray typeface on a medium gray background at the bottom of the webpage? Is the website designed in a way that the user could complete a sale without ever needing to scroll to the part of the page with the link to the agreement? The answers to these questions should be no if you hope to enforce your browse-wrap agreement.
Strategies for Strengthening Enforceability
Use click-wrap agreements instead of browse-wrap agreements. While requiring users to click “I Accept” does not guarantee that your online agreements will be enforceable, requiring users to affirmatively manifest their assent to the terms of your online agreements is certainly better than hoping they find and read the agreements. If you operate an e-commerce website or app, consider requiring users to consent to your terms of use and privacy policy at checkout. The cases show that you may not be able to rely on online agreements that are merely hyperlinked at the bottom of a webpage, especially if they contain provisions like class action or jury trial waivers.
Make design choices that make your terms of use and privacy policy easy to find. If you are asking users to enter into a click-wrap agreement, consider placing the agreement in a scrollable text box that is immediately above the “I Accept” button or check box so your users can easily read the agreement. Use typography that calls attention to your agreements, instead of obscuring them.
If you do decide to use a browse-wrap agreement, consider posting banners indicating to users that their continued use of your website or app constitutes consent to your terms of use and privacy policy. Since the cases on browse-wrap agreements focus in part on whether there is actual notice of the terms of the agreement, using banners or other announcement features may make it more likely that your users will have actual notice of the agreement. Consider using a landing page that discloses the terms of use and privacy policy before a user can access your main webpage.
