As case law has evolved, enforceability based on merely browsing a website (so-called "browse-wrap" agreements) has become disfavored, and "click-wrap" agreements have become the norm. In a recent case involving Uber's terms of service, the court provided detailed guidance on the precise features of a website that are needed to make an enforceable click-wrap agreement. The case came out of the Second Circuit, which also authored another informative decision on click-wrap agreements in 2016 that shows small business owners what to leave out of their websites.
The case, Meyer v. Uber Technologies, 868 F.3d 66 (2nd Cir. Aug. 17, 2017), was brought by a Uber user as a putative class action alleging antitrust claims. Uber promptly moved to compel arbitration based on its argument that Meyer agreed to a mandatory arbitration provision in the company’s terms of service when he registered his account. According to the district court, the terms were not reasonably conspicuous and therefore the user did not assent to arbitration; the motion to compel arbitration was denied.
The Second Circuit appellate court overturned this decision and remanded. The Meyer court said the reasonableness of Uber’s contracting process would be reviewed from the perspective of a “reasonably prudent smartphone user,” characterized as a typical smartphone user familiar with app registration and aware that hyperlinked text near the register button takes them to further information about the specific terms. The court concluded that the design of the screen and language used by the Uber mobile interface rendered the notice reasonable under the law, and that Meyer unambiguously manifested assent to Uber’s terms of service. The court ruled that a reasonable user would know that clicking the “Register” button meant agreement to the terms and conditions that were accessible via the hyperlink.
The court cited the following specific helpful design features that should be on every web developer's radar going forward:
- No Scrolling Required: Users did not have to scroll to see that the Terms of Service became binding once the Register button was clicked; all of this information was visible in the same screen view.
- Use of Contrast to Emphasize Important Information: Uber's app used dark print against a white background, and hyperlinks that were blue and underlined, to conspicuously draw the user's attention to the terms and conditions. On this point, the court stated “a reasonably prudent smartphone user knows that text that is highlighted in blue and underlined is hyperlinked to another webpage where additional information will be found.”
- Cluttered Registration Page: Amazon’s registration page was considerably cluttered in the court's view. The court compared the page to an apple stand with a wall filled with signs, some prominently displayed and containing "necessary" information, and other information that could be quickly disregarded as unimportant. Buried in this clutter was one sign binding the user "to additional terms as a condition of...purchase.”
- Inconspicuous Lettering: The court criticized the fact that Amazon’s lettering was “not bold, capitalized or conspicuous in light of the whole webpage."
In an interesting side note, on remand in the Nicosia case, a magistrate judge recently granted Amazon's motion to compel arbitration on other grounds, based on the fact that the plaintiff made 38 visits and purchases on Amazon’s website after the terms had been changed to include an arbitration clause, which meant the plaintiff had constructive notice of the provision.