By: Joseph P. Glackin
Fundamental Contract Principles
An essential element under basic contract formation principles is a mutual manifestation of assent. Manifestation of assent describes words or acts that objectively show that there has been consent to a contract between parties. Where assent to terms is passive, the question of contract formation turns on weather a reasonable person would be on notice of the terms at issue. If a reasonable person was on notice but did not read the terms, a contract would still be enforceable.
Browswrap v. Clickwrap Agreements
These principles being:
1) Terms will generally NOT be enforced if (a) no evidence that the website user had notice of the agreement; or (b) a hyperlink to the terms is buried at the bottom of a webpage.
2) Terms will be enforced if design or content of a website or application encourages the user to review the terms.
Browsewrap agreements refer to a contract or agreement covering access to use of materials on a website or downloadable product such as a smartphone application. In most cases, websites typically have a hyperlink to their terms and conditions, and notify consumers/users that by simply using the website, running an application, or accessing information, a user is agreeing to be bound to the aforementioned terms.
If a user is agreeing to be bound to certain terms simply by using a website or an application, there is no manifestation of assent. In practice, this means that a user can continue to use an application or website without actually visiting the webpage of terms or even knowing that the terms are of existence. This is counterintuitive to a reasonable person having notice of the terms, and thus is hard to be held as an enforceable contract. Taking this into consideration, courts have generally come to a consensus that browsewrap agreements are generally only enforceable if users have both a reasonable notice of the terms and have assented to those terms.
Reasonable Notice of Terms
Assent to the Terms
In order for a court to infer assent and hold a browsewrap agreement as enforceable, an individual user or consumer may impliedly accept terms by their conduct (such as accessing the site or service), and purchasing a product or service from the website or application. Recent trends have pointed out that courts are more likely to enforce browsewraps against corporations and businesses, and are less likely to enforce against individual consumers.
Unlike browsewrap agreements, clickwrap agreements require an active role by individual users, where a user has to click a box stating “I AGREE” after being presented with terms of agreement, but prior to downloading or making a purchase. This affirmative action of clicking “I AGREE” manifests assent. In most cases, courts have enforced clickwrap agreements. However, more recently courts have expanded the inquiry to look at whether the terms were reasonably communicated to the user (i.e. effectively fulfilling the aforementioned reasonable notice requirement). It has been noted that the box that a user has to click needs to be clear and concise, and that checking it constitutes assent to the terms. Simply displaying a “Download” or “Proceed” button is not sufficient. The court in Specht v. Netscape Communications Corporation, in the 2nd Circuit, stated “a consumer’s clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking on the download button would signify assent to the terms.”
Recommendations and Best Practices
A. The Scrollwrap Agreement
After much research, it is recommended that a company utilizing a mobile application should heavily side with cautionary measures. These cautionary measures are sufficiently fulfilled with the use of a scrollwrap agreement. As previously mentioned, in this approach a user has to confront an agreement, scroll down to the bottom of the aforementioned agreement, check a box agreeing to be bound, and click a button confirming assent to the contract.
B. “YES” Button in Response to Asking if User Agrees to be Bound