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Lawyers Run The WorldAre Your Clickwrap Forum Selection Clauses Enforceable?

Are Your Clickwrap Forum Selection Clauses Enforceable?


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Earlier this month, the U.S. District Court for the Northern District of California held that clear evidence that a consumer could not have completed an online transaction without checking a box accepting the terms and conditions was sufficient to constitute notice and acceptance of the forum selection clause contained within. Moretti v. Hertz Corp., No. 13-2972, 2014 WL 1410432 (N.D. Cal. Apr. 11, 2014).

Here, the plaintiff filed a putative consumer class action in California state court against a car rental company and a travel website over a price disclosure dispute.  Defendants removed the action to federal court and sought to transfer the case to the District of Delaware based upon a forum selection clause included in the terms of use on the travel website through which the car rental was arranged.

In support of the motion to transfer, the travel website provided employee declarations establishing that the relevant terms of use included a forum selection clause and that clicking an “acceptance box” demonstrating assent to the terms was a condition precedent to completing the transaction.  The terms were made available via hyperlink.

The plaintiff did not dispute completing the transaction or affirmatively deny clicking to accept the terms and conditions.  As a result, the defendants’ motion was granted and the case transferred to Delaware.

Pursuant to California law, a forum selection clause in an adhesion contract requires adequate notice to users of their acceptance of the clause. An adhesion contract is a standard form contract drafted by one party with a stronger bargaining power and signed by the weaker party who, typically, does not have the power to negotiate the terms.  An acceptance button immediately followed by a hyperlink to the terms of service is usually sufficient notice as long as the consumer has access to the material terms, even if they are not presented on the same page.

Last year the U.S. District Court for the Eastern District of New York held that an individual who signed up for an online service by checking a box to indicate acceptance of the terms of use and clicking an accept button is bound by the terms’ forum selection clause, despite a failure to read them.  The process was a hybrid clickwrap and browsewrap agreement.  Even though the plaintiff had to click on a hyperlink to read them, the terms were found to be enforceable under New York law because they were reasonably communicated.

In Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002), the court held that terms in an online browsewrap were not enforceable because a customer could click on a button to sign up for a service without notice that the click was indicating assent to unseen terms.  Reference to the terms was far below the button the consumer had to click to sign-up.

Contact a website terms and conditions attorney to discuss maximizing the likelihood of enforceability.  Always provide clear and conspicuous notice of all terms and privacy practices.  Require parties to expressly and unequivocally manifest assent prior to use of the relevant services.  If it is not practical to obtain consent prior to accessing the website material, ensure that the terms and conditions are prominently placed on the website so that a user will have reasonable notice of the actual terms and that the website is subject to them.

Website terms and conditions that are only available via an inconspicuous hyperlink in mouseprint are likely unenforceable. If it does not feel like reasonable notice and acceptance, it probably is not.

Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney. 

Richard B. Newman
Richard B. Newman
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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