The case involved an online purchase of discontinued Hewlett-Packard Touchpads on the Barnes & Noble website. Kevin Khoa Nguyen bought two of the Touchpads online on August 21, 2011 and received an email confirming the purchase. However, on the following day he received an email from Barnes & Noble telling him that his order had been cancelled due to unexpectedly high demand for the devices.In April of 2012, Nguyen filed suit in the California Superior Court alleging that the company had engaged in deceptive business practices and false advertising.
Unlike a clickwrap agreement, a browsewrap agreement does not require the user to manifest assent to the terms and conditions expressly . . . [a] party instead gives his assent simply by using the website. … Indeed, “in a pure-form browsewrap agreement, `the website will contain a notice that—by merely using the services of, obtaining information from, or initiating applications within the website—the user is agreeing to and is bound by the site’s terms of service.’”
And stated that, if
Barnes & Noble argued that the placement of the hyperlink at the bottom corner of every page, close to the buttons a consumer must click to complete a purchase, was enough to put a reasonably prudent user on constructive notice. The Ninth Circuit disagreed, saying that even inclusion of a “conspicuous hyperlink” on each website page does not suffice, and does not amount to constructive notice if it is not supplemented with notice to users or prompts to take “affirmative action to demonstrate assent.” The court further states:
While failure to read a contract before agreeing to its terms does not relieve a party of its obligations under the contract, [cite] the onus must be on website owners to put users on notice of the terms to which they wish to bind consumers. Given the breadth of the range of technological savvy of online purchasers, consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.
Although the decision is only binding in the Ninth Circuit (which includes California), this court is very influential when it comes to technology law matters, and other courts are likely to follow its lead. District courts within (and eventually outside) the Ninth Circuit may be reluctant to enforce browsewrap agreements against consumers unless website owners do more than post inconspicuous and even conspicuous hyperlinks to such agreements.
Website owners may want to consider using clickwrap agreements, instead of browsewrap, to have a higher level of confidence that the terms will indeed be enforced.