Articles and Speeches
Ninth Circuit Clarifies Notice Requirements for
Fundamental Contract Principles Govern Online Agreements
Despite the fact that online commerce provides many new and novel ways to transact business, the underlying principles of contract remain unchanged and still require a mutual manifestation of assent. Online agreements typically come in one of two forms, “click-wrap” (or “click-through”) and “browse-wrap.” In the click-wrap context, a website user is presented with an agreement and required to take an affirmative action to demonstrate her assent, such as clicking a button or providing a digital signature. In a browse-wrap context, the agreement is available on a website, usually via hyperlink in a common section, like a footer, and the user can view its terms but is not required to do so in order to use to the website and be bound by those terms. While equally valid and perhaps more convenient to implement, browse-wrap agreements tend to be more difficult to enforce because a user’s assent must be inferred or implied as opposed to being demonstrated through an overt act.
Browse-Wrap Agreement Elements for Assent
Further Guidance Regarding Constructive Notice
Recommendations for Website Owners
As a matter of contract law, browse-wrap agreements will ultimately be analyzed under guidelines that may vary by state. For example, although the underlying contract principles will be the same, one state’s standard for what constitutes a “conspicuous” hyperlink may be different from that of another state. As such, the Nguyen decision will not necessarily become a national standard; however, it provides excellent guidance for establishing minimum notice requirements for website owners that choose to utilize browse-wrap agreements.
 No. 12-56628, 2014 WL 4056549 (9th Cir. Aug. 18, 2014).
David Katz is a partner in Nelson Mullins Riley & Scarborough's Atlanta office where he leads the Privacy and Information Security Practice Group.
Daniel Lumm is an associate in the Columbia office of Nelson Mullins Riley & Scarborough LLP where he practices in the areas of corporate law, contracts, technology law, Internet and privacy law.
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