Recent Decisions – Consumers Bound By Web Agreements Where They Had Notice

Recent Decisions – Consumers Bound By Web Agreements Where They Had Notice

In August, the Ninth Circuit affirmed the denial of a Barnes & Noble’s motion to compel arbitration per the website’s user agreement, when the agreement was strictly a “browse-wrap agreement”  and there was no evidence users were on notice of the agreement.
We . . . hold that where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice. While failure to read a contract before agreeing to its terms does not relieve a party of its obligations under the contract, the onus must be on website owners to put users on notice of the terms to which they wish to bind consumers. . . . Consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.
Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014).

In December,a  federal district court for Northern California followed the Barnes and Noble case and held users that had agreed to a click-wrap agreement at the time of registration, but were never put on notice of changes to the agreement could not be bounded by the amended language.

Safeway’s claim that a court could infer a customer’s assent to the revised terms from that customer’s continued use of the safeway.com website resembles the type of browsewrap agreement the Ninth Circuit rejected in Nguyen
.
Although Class Members were presented with a clickwrap agreement at the time of their registration, they were never presented with a subsequent clickwrap agreement asking them to consent to the revised Special Terms. As was the case in Nguyen,Class Members could have completed all their subsequent purchases on safeway.com without ever visiting the webpage hosting the revised Special Terms which Safeway claims governed the sale and without ever clicking anything on the web site that would indicate that they have agreed to those terms
.
Customers’ lack of awareness that the Special Terms have been altered undermines Safeway’s claim that each purchase on safeway.com constitutes an agreement to those changes.  Douglas teaches that assent to a contract’s revised terms “can only be inferred ”from a customer’s ongoing use of a service “after [the customer] received proper notice of the proposed changes.” Douglas, 495 F.3d at 1066.
The court explained that as a matter of policy,
. . . the imposition of such an onerous requirement on consumers would be particularly lopsided, as Safeway is aware that it has — or has not — made changes to the Terms and is the party to the contract that wishes for the new terms to govern. “[T]he onus must be on website owners to put users on notice of the terms to which they wish to bind consumers.” Nguyen, 763 F.3d at 1179. Safeway is best positioned to make sure customers are aware of changes that Safeway has made to its contract with Class Members. After making a change, Safeway can take any number of actions to alert users that the Special Terms they agreed to at registration have been altered. For instance, Safeway could ask customers to click to indicate that they agree to the new Special Terms or send all existing safeway.com customers an email in order to ensure that every consumer is aware of a change in the Special Terms prior to making a purchase. When Safeway changed the Special Terms on November 15, 2011, it opted to do neither.
Rodlman v. Safeway, Inc., Case No.11-CV-03003 (N.D. Cal. 2014).

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