Commerce in our country continues to transition from the traditional brick-and-mortar, face-to-face experiences to internet based transactions. With this shift, handshake deals and the formalities associated with executing hard contracts are being replaced by web based contracts and mouse clicks. Web based agreements are not just concerns for techies; they govern the everyday things like online shopping, financial services, social media, job searches, transportation, etc.
Many web based companies are installing arbitration clauses into their terms and conditions, but the proliferation of web based agreements raises the question about whether consumers are actually reading the often detailed, dense terms and conditions. Some scientific research suggests that people may not be reviewing web based agreements with the same level of detail and attention as hard contracts.
Subconsciously, many people may think of reading on a computer or tablet as a less serious affair than reading on paper. Based on a detailed 2005 survey of 113 people in northern California, Ziming Liu of San Jose State University concluded that people reading on screens take a lot of shortcuts—they spend more time browsing, scanning and hunting for keywords compared with people reading on paper, and are more likely to read a document once, and only once.
As a humorous illustration of the point that people are not perusing web based agreements, a few years ago Apple clandestinely inserted phony, rambling thoughts deep into its lengthy terms and conditions for iOS 7, which provided in part:
Oh you know what? This is page 46, nobody’s still reading this. I bet only about five people clicked to read the T&Cs in the first place - we might as well just say anything we like.
Tony on floor 5 of Apple HQ smells of sardines...
For the consumer, the significant distinctions between jury trials and arbitration might not be a laughing matter. Arbitration clauses are often packaged in two commonly used web based agreements, to wit: “clickwrap” agreements and “browsewrap” agreements. (Vitacost.com, Inc. v. McCants, 210 So. 3d 761, 762 (Fla. 4th DCA 2017))
- A clickwrap agreement occurs when the website directs the user or purchaser to the company’s terms and conditions and requires that user or purchaser acknowledge reading and agreeing to the terms and conditions by checking a box or performing some other sign of assent.
- A browsewrap agreement occurs when the website only offers a hyperlink to the company’s terms and conditions and does not require the user or purchaser to perform any act of acknowledgement.
Despite the existence of studies suggesting a reduced level of concentration with screen based reading, courts have generally upheld clickwrap agreements and even enforce browsewrap agreements if certain criteria are met.
In the case of Robbins v. ZipRecruiter, Inc., 26 Fla. L. Weekly Supp. 10, a trial judge sitting in the 6th Judicial Circuit in and for Pinellas County, Florida, recently enforced ZipRecruiter’s arbitration clause contained within the company’s browsewrap agreement. In the well-reasoned opinion, Circuit Court Judge Cynthia Newman cited numerous federal court opinions in which browsewrap arbitration agreements were enforced. The sampling of federal case law included terms and conditions used by such household named companies as Airbnb, Uber, Experian, and Match.com.
The trial court in the ZipRecruiter case carefully distinguished the designs of the browsewrap agreements used by ZipRecruiter and the one at issue in the Vitacost.com case. In the Vitacost.com case, the terms and conditions appeared only after scrolling through multiple web pages, and nowhere on the website did the company advise the purchaser that the sale was subject to the terms and conditions. Therefore, the appellate court in the Vitacost.com case refused to enforce the arbitration clause because “the terms and conditions of sale, including the arbitration agreement, were not sufficiently incorporated into the internet sales agreement between the plaintiff and the seller.”
Enforceability of a browsewrap arbitration agreement
Accordingly, Florida case law suggests that enforceability of a browsewrap arbitration agreement hinges upon whether there is some statement to the effect that enrollment or use of the services is subject to the terms and conditions and that a hyperlink to the terms and conditions (including the arbitration clause) appears in some conspicuous manner on the web page thereby placing the user or purchaser on inquiry notice of the terms and conditions. See e.g. MetroPCS Commc'ns, Inc. v. Porter, 2018 WL 6786813, at *3 (Fla. 3d DCA Dec. 26, 2018) (enforcement of an arbitration clause where “the hyperlink [to the terms and conditions] was not buried in pages of information or hidden at the foot of a web page.”).
The next time you engage in an online sales transaction or subscribe to an online service take notice of the type of web based agreement and peruse the terms and conditions because you just might stumble across an arbitration clause.