Mar. 22, 2019 • by Jeffrey Pote

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With the rise of the Internet has come a proliferation of Internet agreements. Nearly every website you visit has one, making these agreements as ubiquitous as the Internet itself.

Online retail and other Internet-based businesses have been growing steadily in recent years. But, these days even brick-and-mortar businesses must have an online presence. As a result, whatever you sell, you’ll need at least a website and perhaps some social media accounts.

When a business offers something valuable to the public, like a website, it is appropriate for that business to specify the terms on which that site is made available.FN1 As a result, businesses large and small will want to create terms of use, or terms of service, to govern their relationships with their customers. Data privacy and cookie policies are also increasingly important for businesses that collect information about their customers online.

In order to protect businesses and the things they provide, Internet agreements need to be binding and enforceable. If an agreement is unenforceable, it offers at best only the illusion of protection. So what should you do to create an enforceable Internet agreement?

A black smartphone displaying the dictionary result for the word 'design' indicating that it's a noun and the definition starts 'a plan or drawing...'.

In order to protect businesses and the things they provide, Internet agreements need to be binding and enforceable. If an agreement is unenforceable, it offers at best only the illusion of protection. So what should you do to create an enforceable Internet agreement?

Perhaps surprisingly the enforceability of these agreements depends in large part upon the design and content of their associated website.FN2 Of course, the terms contained within the agreement are significant, but at least as important are features or characteristics of a business’s website.

In analyzing the enforceability of Internet agreements, Colorado courts, like those in other states, apply the same general principles that they would for any contract. In general, contract formation requires that the contracting parties have a meeting of the minds on the terms of the agreement and that the offeree objectively manifest acceptance of those terms.FN3

Perhaps surprisingly the enforceability of these agreements depends in large part upon the design and content of their associated website...

Courts have used these general principles to produce specific concepts unique to Internet and other similar agreements. As applied to Internet agreements, these general principles usually require specifically that the consumer-offeree has reasonable notice of the website's terms and manifests assent to those terms.FN4 This is where web design makes all the difference.

Depending on how a website is designed and structured, certain information may be easy or difficult to find. When information is easy enough to find, or “conspicuous,” it may provide proper notice to site users of the terms and conditions - or at least that there are terms and conditions - governing use of the site.FN5

Even when the user does not read the terms, courts generally find that the user had “constructive notice” or “inquiry notice.”FN6 That is, even though they did not actually know what the terms were, they were at least made aware of their existence and that they govern site usage. The law does not generally protect people who do not read the agreements they enter, so ignorance of the terms is no excuse.

Website design and content are also important determinants of whether site users should be considered to have accepted the terms and conditions of a site. For example, was there a checkbox for a user to check next to a hyperlink to the site’s terms, and were they required to check the box? Or did they actually have to scroll through the entirety of the terms and conditions before they could indicate their agreement to them? At the other end of the spectrum, are site users purportedly bound simply on account of their present or continued use of the site?

Depending on answers to these and other questions, courts may come down quite differently on the issue of whether a particular site user actually agreed to or otherwise accepted the site’s terms. Without a user’s acceptance, it does not matter whether there was proper notice. Formation of a binding agreement requires that the customer accept the business’s terms.

In discussing Internet agreements, courts across the U.S. often distinguish among at least four distinct types of agreements. These agreements have important differences in the notice they provide and the means of acceptance offered. They are generally referred to by the unusual names of browsewrap, clickwrap, sign-in-wrap, and scrollwrap agreements.FN7

  1. Browsewrap agreements are defined by the fact that a website user manifests acceptance to the site’s terms and conditions simply by browsing or otherwise continuing to use that site. The terms governing usage of the site are generally made available to site users through hyperlinkage to a separate webpage.

  2. Clickwrap agreements are defined by the fact that the website provides an “affirmative acceptance mechanism,” such as a checkbox or button, by which a site user manifests their acceptance. However, as with browsewrap agreements, the actual terms and conditions are often only available by clicking on a hyperlink to a separate webpage.

  3. Sign-in-wrap agreements are defined by the fact that a site user manifests acceptance of the site’s terms by signing or logging into an account on a website. The site’s terms may be presented on the screen or in a box, or may be available only by clicking on a hyperlink.

  4. Scrollwrap agreements are so-called because the website displays its terms and conditions in a scrollbox that users are generally required to scroll all the way through before manifesting acceptance by, for example, clicking a checkbox or button. As a result, scrollwrap agreements present the entirety of their terms and conditions to users instead of simply hyperlinking to a separate webpage.

While the likelihood of enforcement generally increases as a site moves towards a scrollwrap agreement, even browsewrap agreements are potentially enforceable so long as a website provides sufficient notice to its users that there are terms and conditions which govern use of the site.FN8

Clickwrap agreements, falling somewhere towards the bottom-middle, are nevertheless “routinely" enforced.FN9 However, things can still go wrong depending on either the content or the design of a website. As a result, it is important to understand various web design techniques that lead to the enforceability of Internet agreements.

Text informing site users about governing terms and conditions may employ the following design techniques to increase the conspicuousness of those terms to users:

As a result, it is important to understand various web design techniques that lead to the enforceability of Internet agreements...

Text informing site users about governing terms and conditions may employ the following design techniques to increase the conspicuousness of those terms to users:

  • Using underlines, italics or other font styling;

  • Having the text in a font color that stands out when compared to the background and surrounding text;

  • Using hover effects to change font color or styling when a mouse pointer has scrolled over the hyperlink;

  • Placing the text on the webpage in a central location or other place likely to draw user attention (such as in a contact form or above a checkout button); and

  • Increasing the font size of the text compared to surrounding text.

Conversely, there are some pretty clear things that businesses and their website designers should avoid if they wish to have enforceable Internet agreements. The following are a few examples of what to avoid:

  • Having terms that are available only by clicking an inconspicuous hyperlink buried at the bottom of a webpage;

  • Listing a hyperlink to terms and conditions among various other hyperlinks that are similar in appearance to the term’s hyperlink – such an arrangement obscures the legal significance of the term’s hyperlink; or

  • Having terms that are accessible only after clicking through several links – site users should not have to search for the governing terms.

In the end proper notice comes down to the question of whether a reasonably prudent customer would have been aware of the website’s terms and conditions.FN10 If so, users will have sufficient notice and their continued usage of the site may well be enough to establish an enforceable agreement.

Because Internet agreements are relatively new, the legal landscape is still evolving. As a result, it is important to seek the advice of a qualified attorney when it comes not only to drafting the terms and conditions, but also to inform designing how they will be provided online.

If you would like to find out whether your Internet agreements are meeting the needs of your business, please Reach out, Today!


Click Here to Toggle End Notes:

FN1: Although I primarily discuss website terms and conditions, the same principles apply to agreements involving computer software and mobile applications.

FN2: Starke v. SquareTrade, Inc., 913 F.3d 279 (2nd Cir. 2019) ("In the context of web-based contracts, we look to the design and content of the relevant interface to determine if the contract terms were presented to the offeree in way that would put her on inquiry notice of such terms."). See also Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014).

FN3: See, e.g., Grosvenor v. Qwest Corp., 854 F.Supp.2d 1021 (D.Colo. Feb. 23, 2012) (discussing general principles in the context of a "matter [that] involves contract formation questions attendant to a party manifesting its agreement to a contract's terms by " clicking" on a button during installation of a software program.").

FN4: Turner v. Efinancial, LLC, No. 18-cv-00292-CMA-GPG (D.Colo. Sept. 27, 2018). But note some courts have required that the assent or acceptance be "unambiguous." Hancock v. American Tel. and Tel. Co., Inc., 701 F.3d 1248 (10th Cir. 2012) (noting that "reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility.").

FN5: But see Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) (concluding "that where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on--without more--is insufficient to give rise to constructive notice.").

FN6: Vernon v. Qwest Communications International, Inc., 857 F.Supp.2d 1135 (D.Colo. Mar. 8, 2012) ("Colorado law recognizes that one generally cannot avoid contractual obligations by claiming that he or she did not read the agreement.") (internal quotations omitted).

FN7: See, e.g., Resorb Networks, Inc. v. YouNow.com, 30 N.Y.S.3d 506 (N.Y. Sup. Ct. 2016) (discussing all four types of the Internet agreements listed above).

FN8: See MetroPCS Communications, Inc v. Porter, No. 3D17-375 (Fl.App. Dec. 26, 2018) (noting that "browsewrap agreements have only been enforced when the purchaser has actual knowledge of the terms and conditions, or when the hyperlink to the terms and conditions is conspicuous enough to put a reasonably prudent person on inquiry notice.").

FN9: Turner v. Efinancial, LLC, No. 18-cv-00292-CMA-GPG (D.Colo. Sept. 27, 2018).

FN10: Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014).



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