Contract terms and purchaser assent to those terms, conditions, intended use and warning information provided with a purchased product are known fertile ground for defending product claims.
In today’s virtual age, consumers turn to the internet to purchase products, particularly during the holiday season. In this post, we examine the enforceability of online contracts and corresponding reliance upon virtually provided product documentation.
Manufacturers and sellers often rely upon contracts featured on their websites to govern relationships with consumers. These contracts, often referred to as “Terms of Service” or “Terms of Use” agreements, routinely contain terms and conditions regarding their visitors’ access to and use of the website. These agreements commonly include terms such as venue and arbitration clauses, which tend to favor the websites by permitting them to litigate claims in a more convenient and less expensive forum. Hosts of additional information can also be provided to online consumers including terms of product use, warnings and product labeling. Whether websites succeed in holding their users accountable for having received, understood and accepted this information, however, depends on whether courts are willing to enforce the agreement and recognize a consumer “reviewed and understood” information provided online. As recent court decisions demonstrate, by following certain guidelines, manufacturers and sellers can improve the likelihood that their online contracts and attempt to inform consumers will be enforced and upheld by the courts.
Web-based agreements can broadly be characterized as either “clickwrap” or “browsewrap” agreements. Clickwrap agreements require users to affirmatively indicate assent by taking action, such as clicking an “I accept” button or checking a box before using the website or placing an order. Browsewraps, by contrast, provide users the terms of use, often through hyperlinks on the main page; they do not require users to take any affirmative action expressly indicating their agreement to those terms. Instead, operators of websites containing browsewrap agreements posit that users manifest their assent to their terms of use simply by using the website.
Decisions by courts reviewing the enforceability of these agreements demonstrate that the primary consideration is whether users had notice of the terms and actually agreed to be bound by them. One way to ensure these criteria are met is to have users actually click to assent to the terms. Hence, courts have treated clickwrap agreements more favorably than browsewrap agreements.
In Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012), the plaintiff alleged that Facebook wrongfully disabled his account for discriminatory reasons, causing him emotional distress...
