The notion of a “binding contract” once conjured notions of two parties negotiating back and forth until finally reaching a compromise of some sort. Then, they put it all in writing and both signed their names to indicate precisely what terms they were both agreeing to. That is of course still one way of creating a contract.
In the digital age, courts have at times been quick to find binding contracts in a variety of increasingly less traditional contexts. For example, a “clickwrap” agreement (sometimes called “clickthrough” agreement or “clickwrap license”) is a commonly used in connection with software licenses. For example, a clickwrap agreement is commonly part of the online download and installation process of software. A typical clickwrap agreement requires the consumer to indicate agreement to all of the terms by clicking an “ok” or “agree” button before the consumer is allowed to install or use the software.
“Clickwrap” owes its name to a predecessor variant, so-called “shrink wrap contracts” which were (and are) commonly used in boxed software purchases that were far more common before the rise of the download era. In a shrinkwrap contract, the packaging contains a notice that by merely tearing open the shrinkwrap, the consumer agrees to any and all fine print included within.
Increasingly, Internet websites are trying to create binding contracts by including language along the lines of “[b]y using this website you agree ….” and then setting out or referencing whatever terms are involved. Our courts are still just beginning to fully consider the extent to which such “browse wrap” agreements should be considered binding on website users. Unlike a clickwrap agreement, a browsewrap agreement does not require the user to manifest assent to the terms. Rather, a party supposedly gives his assent simply by using the website.
The Ninth Circuit Court of Appeals was recently called upon to consider the enforceability of a browsewrap agreement in Nguyen v. Barnes & Noble Inc., No. 56628 (9th Cir. Aug. 18, 2014). Siding with consumers and with the traditional concept of a contract, the court of appeals refused to enforce an alleged arbitration agreement within a browsewrap agreement.
The plaintiff Kevin Khoa Nguyen (“Nguyen”) purchased two HP Touchpads on Barnes & Noble’s website in August of 2011, and received an email confirming the transaction. The following day, Nguyen received another email informing him that his order had been cancelled due to unexpectedly high demand. Nguyen filed a class action lawsuit against Barnes & Noble alleging that, as a result of “Barnes & Noble’s representations, as well as the delay in informing him it would not honor the sale,” he was “unable to obtain an HP Tablet during the liquidation period for the discounted price,” and was “forced to rely on substitute tablet technology, which he subsequently purchased … [at] considerable expense.”
The district court refused to compel arbitration and Barnes & Noble appealed.
The issue before the court was simply whether a valid arbitration agreement existed between Nguyen and Barnes & Noble. The Ninth Circuit began by noting “[w]hile new commerce on the Internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract.” Nguyen, supra quoting Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir.2004). “One such principle is the requirement that ‘[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.’” Nguyen, supra quoting Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 29 (2d Cir. 2002).
Turning specifically to the browsewrap context, the Ninth Circuit noted that courts have enforced browsewrap agreements where the user had actual notice of the agreement. However, where there is no evidence that the website user had actual knowledge of the agreement, “the validity of the browsewrap agreement turns on whether the website puts a reasonably prudent user on inquiry notice of the terms of the contract.” Nguyen, supra (citations omitted). Whether a user has inquiry notice of a browsewrap agreement, in turn, depends on the design and content of the website and the agreement’s webpage. Id.
Heygood, Orr & Pearson Guides its Clients through the Complex World of Class Action Lawsuits
A class action lawsuit is a lawsuit brought by a group of people who have suffered similar harm from similar actions of a particular defendant. The lawsuit is filed is by one or sometimes more “class representatives” who ask the court for permission to represent the interests of the entire class, i.e., all those other people who were treated and injured in much the same way.
Class action lawsuits are subject to their rules and often expensive to pursue. There is a great difference to corporations between paying damages to a few victims and paying damages to every victim. Not surprisingly, corporations fight hard to defend themselves against class actions.
Clients who wish to file a class action case need educated, experienced attorneys like those at Heygood, Orr & Pearson. We have the experience and knowledge to guide our clients through class action litigation from beginning to end. We also have the financial resources to help them stand toe-to-toe with some of the biggest corporations in the world through what is often be a lengthy, complicated and expensive process.
Contact Heygood, Orr & Pearson for your free case evaluation and to learn more about your legal right to compensation. Call toll-free 1-877-446-9001 or contact us online by following the preceding link to learn more about your legal rights and options.