Be Super Obvious: A How-to for Enforceable Online AgreementsApril 2016
There are two common methods for forming contracts online: "Clickwrap" agreements, which were involved in Sgouros, require a user to manifest assent to Terms, often by clicking "I Agree" after being presented with a scroll-through version of the Terms. "Browsewrap" agreements, which were involved in Long, rely on a user's use of the website alone to amount to consent. Clickwrap agreements that provide clear notice that the click will constitute acceptance of the relevant Terms are widely recognized as valid contracts; however, the enforceability of browsewrap agreements is less certain.
The Seventh Circuit's Sgouros opinion serves as a reminder that, although putting users on reasonable notice that their click of a button constitutes assent to a clickwrap agreement "is not hard to accomplish," it is not foolproof. The Seventh Circuit found that TransUnion failed to provide this notice by, among other things, misleading the customer as to what they were agreeing. For example, the court observed that while there was a bold paragraph between scroll-through Terms and the "I Accept & Continue to Step 3" button informing the user that clicking on the box constituted authorization for TransUnion to obtain personal information, it did not mention the contractual Terms or the arbitration clause contained therein. In fact, as the court noted, "the web pages on which Sgouros completed his purchase contained no clear statement that his purchase was subject to any terms and conditions of sale." The Seventh Circuit thus refused to enforce TransUnion's Terms, reaffirming that websites should avoid any ambiguity and ensure that their users will realize that the "I Agree" button, or its equivalent, pertains exclusively to their Terms.
In order to ensure the enforceability of your online Terms, or if you have other questions concerning the legal implications of your activities online, including as they relate to privacy laws, please contact John Greenberg, Carleen Griffith, or Krista McCormack.