eCommerce and browsewrap: getting the terms and conditions right
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A recent internet law case involving a novel set of circumstances should serve as a warning to eCommerce sites on how they put online buyers on notice about their terms and conditions.
Last month, a Florida state appellate court struck down the validity of an online seller’s “terms and conditions” in a dispute with a buyer. The case, Vitacost.com Inc. versus McCants,* involved the enforceability of an arbitration clause in a “browsewrap” agreement – a relatively nascent legal topic and something no Florida court had ruled on before. As such, the case is likely to have a notable impact on the eCommerce legal landscape as a whole.
What is browsewrap?
“Browsewrap” refers to legal terms and conditions to which, when enforceable, website users are subject. In the eCommerce context, e-commerce sites typically provide a hyperlink to the browsewrap agreement before and/or during the checkout process. Unlike in “clickwrap” scenarios, website users are not directed to click on a checkbox to acknowledge or agree to the terms and conditions; instead, their agreement is taken to be implicit by merely continuing to use the website or complete a transaction via the website – even if they never click on the link to the terms and conditions.
For this reason, U.S. courts have enforced browsewrap agreements in cases when buyers did not click on the link (or otherwise actually know the terms and conditions) but the hyperlink itself was “conspicuous enough to put a reasonably prudent person on … notice.” See the case of Nguyen versus Barnes & Noble Inc as an example.
Pay no attention to those terms and conditions behind the curtain
Apparently, Kroger subsidiary Vitacost.com took browsewrap inconspicuousness to a new level.
Vitacost.com attempted to compare its position in this case to that of computer manufacturer Dell in a notable and oft-cited 2005 Illinois case, Hubbert versus Dell Corp. In Hubbert, buyers disputed the binding effect of browsewrap that had been labeled as “Dell’s terms and conditions of sale.” Still, Dell won the case, in part, because of how conspicuous its browsewrap terms were. Vitacost.com, however, merely labeled its browsewrap agreement as “terms and conditions” once site users were ready to check out.
“[T]he hyperlink is labeled ‘terms and conditions,’ not ‘terms and conditions of sale,’” the Vitacost.com court observed. It later wrote, “Here, unlike Hubbert, none of the webpages made the plaintiff’s purchase subject to the ‘terms and conditions of sale.’ The seller’s website allowed a purchaser to select a product and proceed to check-out without seeing the hyperlink to the ‘terms and conditions’ because the hyperlink would not be visible unless the purchaser scrolled to the bottom of the page. Once on the check-out webpage, the hyperlink is only labeled ‘terms and conditions,’ and the page contains no statement that the sale is subject to those ‘terms and conditions.'”
Indeed, exacerbating the problem, Vitacost.com dumped its browsewrap link at the bottom of most of its pages, requiring buyers to “scroll through multiple pages of products before reaching the bottom where the link was located.”
Moreover, the only other notice given to the Vitacost.com user, apparently, was a message at the bottom of the checkout page that read, “Before submitting your order, please take a moment to make sure everything looks good.”
“This is hardly an admonition for the purchaser to check and agree to the terms and conditions of the sale,” held the court.
eCommerce lessons from Vitacost.com’s browsewrap mistakes
While the Vitacost.com case represents a state court ruling on Florida’s law of contracts (and, as such, has no binding precedential effect outside of Florida), contract law is relatively consistent throughout the U.S.; therefore, future courts and litigants are sure to look to this decision for persuasive effect.
The “terms and conditions” takeaways for e-commerce practitioners are, accordingly, fourfold:
- Be explicit.The Vitacost.com court held against the online seller largely because of generalities in the seller’s language (e.g., “terms and conditions” without an “of sale” qualifier, “make sure everything looks good”).
- Be conspicuous. While the enforceability of browsewrap terms does not always hinge on beat-the-buyer-over-the-head obviousness, how much a website’s browsewrap terms (and/or the hyperlinks thereto) stand out on the webpage is a significant factor that courts weigh when determining their applicability. Historically, courts have disfavored enforcing browsewrap agreements where the hyperlink to those terms was “buried” at the bottom – or even in the middle – of a webpage. See In re Zappos.com Incas an example.
- Consider clickwrap. While arguably more intrusive, clickwrap agreements tend to, potentially, be more favorable to online sellers because they require buyers to affirmatively click to acknowledge and/or agree to terms and conditions before proceeding with checking out.
- Leave it to the lawyers. At the end of the day, browsewrap and clickwrap represent a collection of contract terms and legal disclaimers. True, legalese may be unappealing, but there’s usually a good reason why lawyers write things the way they do. It’s best to trust the professionals and have a lawyer draft and construct your browsewrap and clickwrap for you.
*(Vitacost.com, Inc. v. McCants, No. 4D16-3384 (Fla. Dist. Ct. App. 2017))
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