Click with Caution
As you browse a website, be cautious before you click on the user agreement; you might not even realize you are entering into an enforceable contract. This issue was recently addressed by a California appellate court in B.D., a Minor, etc., et. al. v. Blizzard Entertainment, Inc.
In Blizzard, a dispute arose between a “user” and the “owner” of an online gaming website. The user filed a law suit in state court, but the owner moved to compel arbitration, arguing that the dispute resolution provision incorporated into its online licensing agreement controlled.
The court held in favor of the owner and concluded that the website user had sufficient notice which made the arbitration provision enforceable. In doing so, it identified the different forms of online agreements to which consumers should be aware:
- A “scrollwrap” agreement is a clickwrap agreement which requires the user to physically scroll to the bottom of the agreement to click the button to accept the terms.
California Courts have generally found clickwrap and scrollwrap agreements are enforceable because they provide sufficient notice to the user. In contrast, browsewrap agreements are unenforceable because they do not provide sufficient notice. Sign-in wraps vary by court, depending on the facts – when signing up for a single use/ one-time purchase, courts have found that consumers would not reasonably expect to be bound to some agreement, as compared with a consumer signing up for an ongoing relationship with the website. As such, when the purpose of the site is to create a “forward-looking,” more “long term” relationship with the user, a sign-in wrap agreement will most likely be deemed valid.
So, think twice before you “click,” and make sure to review the online agreement before you give your consent.