Cyberlaw Client Alert

Many website users seem to glance over terms and conditions listed on a website, but one court case regarding this issue is worth a closer look. A just-issued Ninth Circuit decision could potentially impact any business with a web presence that wishes to bind its users to its terms and conditions.

The decision, issued on August 18, 2014, in the case Nguyen v. Barnes & Noble, 2014 U.S. App. LEXIS 15868 (9th Cir. Cal. Aug. 18, 2014), held that a website user is not bound by a website’s “browsewrap” terms and conditions, even when:

• A site contains a link to the terms and conditions, but the user is not required to take an affirmative step to consent; and
   
• There is no evidence that the consumer had knowledge of the terms and conditions.

More and more businesses have an online presence, where consumers use the company’s website to purchase a good or service online. The websites typically have what’s referred to as either a “clickwrap” or a “browsewrap” agreement. The “clickwrap” agreement lists the terms and conditions of the transaction and requires the user to click on a box that generally states, “I agree”. The “browsewrap” agreement is the more passive version, where a link at the bottom of the webpage allows the user to access the terms and conditions if they choose, which can be viewed on another webpage.

In this case, the three-judge panel did not enforce the arbitration agreement contained in Barnes & Noble’s “browsewrap” terms and conditions, holding that the merchant did not take enough steps to ensure its customers were aware of the terms.

Given the potential massive impact of the website terms and conditions, all businesses conducting business over a website in the Ninth Circuit (composed of California, Arizona, Nevada, Washington, Oregon, Idaho, Montana, Alaska, Hawaii and Guam) should review and update the manner in which customers agree to the website’s terms and conditions. Please contact us if you require assistance in making sure your website would meet the court’s requirements.

Leo A. Bautista*
Shelly Rosenfeld
Lewis Brisbois Bisgaard & Smith LLP
221 N. Figueroa Street, Suite 1200
Los Angeles, CA 90012
T: 213.250.1800  F: 213.250.7900
Leo.Bautista@lewisbrisbois.com
Shelly.Rosenfeld@lewisbrisbois.com

*Leo A. Bautista is a partner and Shelly Rosenfeld is an associate in the Intellectual Property and Technology Practice Group of Lewis Brisbois Bisgaard & Smith LLP.