Sept. 29 Record Reporter
The plaintiff, Kevin Khoa Nguyen, was a putative class representative who purchased two Hewlett–Packard Touchpads from Barnes & Noble at liquidation sale prices. Due to unexpected demand, Barnes & Noble declined to fulfill the plaintiff’s two-unit order. The plaintiff purchased two tablets from other manufacturers at a higher price, and he sued on behalf of the whole class for damages.
The 9th Circuit began its analysis with the principle that ordinary rules of contract apply to Internet commerce. “While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract.”2
Applying this principle, the court invoked the common law rule that mutual manifestation of assent is required to form an enforceable contract.
With that in mind, the court discussed the principle of mutual manifestation of assent in the context of clickwrap and browsewrap agreements. In a clickwrap agreement, the Internet user manifests his consent to the terms of a contract by affirmatively clicking a box or button indicating his agreement. Some of the more cautiously designed clickwrap agreements force the user to open or scroll through the terms also.
In contrast, browsewrap agreements are terms posted on the website. In a browsewrap scenario the Internet user is (at least purportedly) deemed to consent to the terms by some unrelated action, often continued use of the website.
In reaching this holding, the court distinguished a similar case that had held that placement of a link to the website’s terms near the purchase button provided constructive notice. In that case the final page of the checkout screen also contained a warning to “Review Terms.” This two-word warning made the difference between a having an enforceable written contract and lacking it. This subtle distinction reveals that companies doing business online have quite a bit riding on the presence or absence of a few words on their websites. Website owners relying on browsewrap agreements should take extra care that their sites give consumers adequate notice, lest another two-word omission cost them a class action defense.
Samuel Doncaster is a senior litigator at Rose Law Group PC. He regularly litigates online defamation, electronic commerce and cyber law. To further discuss online defamation or any cyber law matter, Doncaster may be reached at email@example.com, or (480) 291-0747.
1 Nguyen v. Barnes & Noble, No. 12–56628, op. (9th Cir. August 18, 2014) available at 2014 WL 4056549.
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