The Second Circuit Court of Appeals recently issued its decision in Meyer v. Uber Technologies, Inc., finding that a browsewrap agreement was enforceable, including the arbitration clause contained in that agreement.
“Browsewrap” agreements are agreements formed by simply posting terms and conditions on a website via a hyperlink at the bottom of the screen. Unlike “clickwrap” agreements, which require a user to affirmatively click a button that says “I agree” or similar, browsewrap agreements require no affirmative act from the user to accept the agreement – providing adequate notice of the terms and conditions is sufficient to make them binding. This lack of affirmative action by the party to be bound by the terms and conditions has led to courts varying widely on the enforceability of browsewrap agreements.
In finding that the browsewrap agreement was enforceable, the Second Circuit found that design of the user interface of the Uber app adequately notified the user of the terms and conditions, such that the terms and conditions were binding — even if the user never read the terms or claims to be unaware of the notice. In finding that the user interface was sufficient to communicate adequate notice of the terms and conditions, the Second Circuit focused on the following factors:
- Uncluttered, minimal user interface without distracting buttons, links, or text.
- The hyperlinked notice of terms and conditions was spatially and temporally coupled to the fields in which the user was to enter personal data to create an account.
- The user did not need to scroll down to see the notice; it was displayed on the front screen.
- The font color of the notice contrasted sharply with the background screen color.
These factors provide good guidance to help ensure that online terms and conditions will be enforceable. Further, the court’s analysis in Meyer may apply more broadly to other efforts to have terms and conditions become binding through notice, such as by referencing terms and conditions on purchase orders, order acknowledgments, or even in emails. Any party relying on mere reference to terms and conditions would be well served to follow the guidance offered in the Meyer decision to help ensure those terms and conditions will be enforceable.
This post was written by Bryan Seigworth.