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Posted by on Mar 23, 2016 in Publications |

Court of Appeals: All Websites Must Revise Their Terms of Use

Court of Appeals: All Websites Must Revise Their Terms of Use

In a case of first impression for California appellate courts, on March 17, 2016, Brett Long v. Provide Commerce, Inc. defined what sort of website design elements would be necessary or sufficient to create an enforceable browsewrap agreement in the absence of actual notice of said agreement. For some of you that sentence might be just a bunch of technical and legal jargon that doesn’t mean much, so let’s take a step back and get everyone on the same page before diving in. If you’re already on that page, feel free to skip the next couple of sections

What’s a “browsewrap agreement”?

Go to a website, any website (or you could, you know, just stay on this website), and take a look at the bottom of the page. I’ll use the Google search website for our example, though, probably a page everyone is familiar with. At the bottom right of the page (or at the bottom center-ish of the page if you’re on a mobile device), you’ll see the word “Terms.” On some websites there might be a similar link called “Terms and Conditions,” “Terms of Use,” or “Conditions of Use.” These are what are commonly referred to as “browsewrap” agreements – that is, terms and/or conditions that a user is assumed to have agreed to merely by the continued use of the website.

Websites need to be designed too

A website is like a newspaper layout in that there are a number of decisions that have to be made about what goes where and what it will look like. Just like a newspaper editor must decide where to place certain articles and their headlines or what size the articles and their headlines should be presented at, so must a website designer decide where to place the various elements of the website – e.g. pictures, menus, links, etc. – and how those elements will appear on the website – e.g. color, size, and placement.

The reason that much thought and care needs to be put into these design elements is that the design elements are what both catch a user’s attention and direct them to where the website wants them to go or thinks the user wants to go. Just as a gigantic, bold headline on a newspaper immediately catches the reader’s eye and draws them into reading that particular article, so do design elements in the website draw the user’s attention to certain parts of a website, whether it be a key piece of information that the website wishes to convey or a product that the website wishes to sell. Moreover, just as we expect a degree of polish in the visual presentation of newspapers and magazines, so to does a polished and aesthetically-pleasing website raise the user’s perceived value and reliability of the website and, in turn, that of the business that operates the website.

Terms of Use must be open and obvious to all users

Now that we’ve defined all of our terms, let’s get back to the case. Basically, Brett Long ordered flowers from Proflowers.com, was ultimately unhappy with the experience, and sued the parent company, Provide Commerce, Inc. for consumer fraud. Provide moved to compel arbitration based on the Terms of Use contained on the website and Mr. Long opposed arbitration, arguing that he never agreed to the Terms of Use on the website and so could not be bound by them. The trial court agreed with Mr. Long and, ultimately, so did the Court of Appeals.

In ruling in favor of Mr. Long on this case of first impression, the Court of Appeals held that in order for a website’s Terms of Use to be enforceable against a user, the “placement, color, size and other qualities relative to the…website’s overall design” must make the hyperlink for the Terms of Use conspicuous enough so as to put a reasonable user on notice of its existence. In other words the link to the terms of use must be open and obvious to even the most casual, technically-limited user of the website.

With respect to Proflowers.com, the Court of Appeals took issue with the location and color of the Terms of Use link, as well as the other elements around it that the Court believed hid the link or at least distracted the user from discovering its existence. In fact, the Court specifically noted that it was difficult to find the link for the Terms of Use even when the Court was specifically looking for it.

This result is not necessarily surprising, given that it is simply an extension of existing contract law to “digital” contracts – that is, contracts have always required the mutual agreement of all parties to be enforceable and you cannot have mutual agreement when one party doesn’t even know that a contract exists.

Websites may need to instruct users about the effect of the Terms of Use

What is somewhat surprising, however, are the comments by the Court of Appeals that it made after finding that the link was too hidden. The Court of Appeals stated that “a textual notice should be required to advise consumers that continued use of a website will constitute the consumer’s agreement to be bound by the website’s terms of use” and subsequently warned online retailers that they “would be well-advised to include a conspicuous textual notice within their terms of use hyperlink going forward.”

Though this is merely dicta, since the Court of Appeals declined to actually rule on this particular issue, it nonetheless places all website owners and designers on notice that not only must the existence of terms of use be open and obvious, but in order for them to be enforceable the website may also have to notify a user that his her or her continued use of the website requires an agreement to be bound by the terms of use

Websites must be update their approach to their Terms of Use

So what does this mean for website designs?

First, this means that websites must do more to draw a user’s attention to the Terms of Use. This is important from a legal perspective because the Terms of Use are put there specifically to protect the owner of the website from potential litigation down the road, such that you can’t just ignore the Court of Appeals’ ruling and keep your websites as is.

However, given that really the only standard right now is that the display of the Terms of Use must be better than Proflowers.com in order to be enforceable, the Court of Appeals did not offer much practical guidance other than to say that the placement, size, color, and “other stuff” must make the Terms of Use “reasonably conspicuous.” Real helpful, right?

Perhaps the best litmus test is simply this: call up that friend or family member who hates technology and doesn’t like using the internet and cajole him or her to visit your website and look around for sixty seconds. Afterwards, ask them if they noticed the “Terms of Use” – or whatever else you may call it – on your webpage. If the answer is yes, you’re probably good to go; if not, you might consider changing something about the Terms of Use. Whether that’s by moving its location, making it larger, making the font darker, or even de-cluttering your webpage so that every element (including the Terms of Use) stands out more, it’s ultimately up to the website designer to find a balance between making the Terms of Use open and obvious while still maintaining a well-designed and aesthetically pleasing website (e.g. please don’t make it hot pink in size 128 font).

This trickier part is this: how do you make sure that all users know that they will be bound by the Terms of Use, and therefore should read the Terms of Use but, more importantly, do so in a manner that doesn’t annoy or alienate the user? For example, a pop-up window telling the user to read the Terms of Use would certainly give the user notice but would also certainly annoy or even drive away users. This is all-the-more true since more and more users are using their mobile devices and apps to access your website content on a smaller screen and for shorter periods of time, which serves to only further restrict your ability to cleanly give the user notice.

Although there is no clear answer without further guidance from the Court of Appeals, it remains clear that this needs to be both a legal and design solution. The legal solution will have to find a way give the average user reasonable notice of both the Terms of Use and the effect of the Terms of Use while the design solution must find a way to maintain the aesthetics and design vision of both the website and the company it reflects. You need both, however, to ensure that you are better protected from legal challenges from users in the future and that you’ll still actually have users in the future.

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If you’re involved in a lawsuit or risk management and have any questions regarding current or potential legal issues, we would urge you to contact an attorney as soon as possible to obtain advice, guidance and representation. At Baker, Keener & Nahra, we have the experience, skill, and drive to get the best possible results for our clients, no matter the size of the case or the scope of the problem. So if we can be of any assistance to you, please contact us and let us know how we can help.