Earlier this week, the Ninth Circuit ruled that Barnes & Noble couldn't enforce an arbitration agreement against a customer. The only notice of the arbitration clause was buried in an agreement the user had to find by clicking a link to it on Barnes & Noble's website.
These agreements -- called "browsewrap" or "clickwrap" agreements -- are popular because they bury the lede in fine print -- which the Ninth Circuit said wasn't OK.
In order to protect the enforceability of your website terms of service, here are five alternatives to "clickwrap"/"browsewrap" agreements that should past the Ninth Circuit's muster:
1. Pop-Up Windows.
Obtrusive, but they get the job done. The Ninth Circuit faulted B&N for placing the onus of finding the agreement on the customer. A pop-up window can be tastefully deployed before the customer enters the website, forcing the customer to read the agreement (a link will be provided, of course) -- or, at least, click to acknowledge that he's read it before he can continue with the rest of the website. (Alternatively, a pop-up can be deployed while the user is on the page.)
2. Call Out Updates on the Main Page.
Whenever the website's terms of services are updated, you can place a conspicuous banner at the top of the company home page letting users know that the terms of service have changed, with a link to the new terms of service. It's less obtrusive, but after a while, you'd need to remove the banner (because it's not really "news" anymore), meaning new customers won't know there's been an update.
3. Email Messages.
Customers hate getting unwanted emails, but hey, this is about protecting their rights, too. You can utilize existing email lists to send a mass message to all customers notifying them of updates to the terms of service, along with a link to the text or -- even better for compliance! -- a brief summary of changes to the terms of service.
4. Landing Pages.
Alcohol manufacturers use landing pages to ensure that visitors to their websites are over 21 -- although, on the Internet, no one knows you're a dog. Even so, a landing page with a checkbox that either makes you read the terms of service or acknowledge that you've read them serves the same function as a pop-up window, albeit a little more gracefully.
5. Force an Acknowledgment at Login.
If a user is logging into your website to access a service, you can easily program the login so that once a user logs in, he or she must acknowledge changes to the terms of service before continuing. Many companies use this method, and it's probably the best alternative because it doesn't alienate non-customers, but at the same time, provides extremely simple notice to current customers.
What's the key takeaway from these five alternatives? They all affirmatively place the update in front of the user, rather than make a user hunt for the terms of service, which the Ninth Circuit disapproved of in Nguyen. Using "fine print" to hide a clause that the user won't like isn't going to cut it anymore. Users, when they find out about it, don't like it, and courts aren't impressed by it either.
- The Shrinking Relevance of Shrinkwrap Decisions (Bloomberg BNA)
- Nguyen v. Barnes & Noble Inc. (FindLaw's Cases & Codes)
- Zappos' Online User Agreement Gets the Boot (FindLaw's In House)
- LinkedIn Litigation: Shrinkwrap Licensing Stretched to its Limits? (FindLaw's U.S. Ninth Circuit Blog)