The case arose from a “fire sale” by defendant Barnes & Noble of certain discontinued Hewlett Packard TouchPads. Plaintiff Nguyen had ordered two of the TouchPads, but received a notice from Barnes & Noble the following day that his order had been cancelled due to unexpectedly high demand. Nguyen sued Barnes & Noble in California Superior Court on behalf of himself and a putative class, arguing that he was forced to buy a more expensive tablet instead.
The district court agreed with Nguyen, Barnes & Noble appealed, and the Ninth Circuit affirmed.
Applying New York law, the Ninth Circuit examined the law of “clickwrap” and “browsewrap” agreements and commented that “[t]he defining feature of browsewrap agreements is that the user can continue to use the website or other services without visiting the page hosting the browsewrap agreement or even knowing that such a web page exists.” Thus, the Ninth Circuit observed, the determination of the validity of the browsewrap contract depends on whether the user has actual or constructive knowledge of the website’s terms and conditions.
The Ninth Circuit noted that courts have consistently enforced browsewrap agreements where the user had actual notice of the agreement but pointed out that courts are more willing to enforce browsewrap agreements where the browsewrap agreement resembles a clickwrap agreement, i.e., where the user is required to affirmatively acknowledge the agreement in some way.
What then must a website owner do to provide the requisite notice? A clear manifestation of consent is the safest way to ensure enforceability—for example, by requiring the user to check an unchecked box before allowing the user to complete a transaction.
It also noted in a footnote that the standard may be higher where agreements are being enforced against consumers than against business entities.