We've posted before on the subject of contract formation in the digital age (see here, for instance). A key question is: what online terms can a consumer be held to if she hasn't read them? The answer depends on how prominent the terms were, whether the consumer had to indicate assent, and whether a reasonable user would know that the terms applied.
In an opinion by the characteristically direct Judge Noonan, the Ninth Circuit yesterday gave an excellent summary of the relevant rules and applied them wisely to hold that a website user was not bound by terms available via a link at the bottom of a website, where the user was not required to check a box agreeing to the terms and was not given reasonable notice that the terms were there. Rejecting an argument that the "terms" link was "close enough" to other key content that the user should have clicked on it, the court held:
[W]here 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. . . . [C]consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.
As a result, a retailer's attempt to enforce an arbitration clause buried in those terms failed.
The case is Nguyen v. Barnes & Noble. (HT: Paul Bland.)
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