The majority (Circuit Judges Ikuta and Hurwitz) observed that the Internet has “not fundamentally changed the requirement that mutual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.” 2020 WL 4601254, at *1 (citation omitted). Mutual assent, however, does not require that a person using a website have actual notice of the arbitration agreement’s terms. Instead, a consumer will be bound by the terms if “a reasonably prudent Internet consumer” would be put on “inquiry notice” of the “agreement’s existence and contents.” Id. (citation omitted).
The majority then discussed the difference between clickwrap and browsewrap. The stronger assent mechanism – clickwrap – requires a consumer to click on an “I agree” box after being presented with terms. Browsewrap terms, on the other hand, are merely posted on a website via a hyperlink.
The closer browsewrap is to clickwrap, the better. Courts are “more willing to find the requisite notice for constructive assent where the browsewrap agreement resembles a clickwrap agreement,” and “where the website contains an explicit textual notice that continued use will act as a manifestation of the user’s intent to be bound, courts have been more amenable to enforcing browsewrap agreements.” Id. (citations omitted).
Judge Hilda Tagle of the Southern District of Texas (sitting by designation) dissented, agreeing with the reasoning of the district court’s denial of Intuit’s motion to compel arbitration. She concluded that the display of links for terms that applied to multiple on-line products would be confusing to a typical Internet consumer. She also found problems with the conspicuousness of both the placement and color of the hyperlinks in relationship to the small sign-in box. Finally, she had a problem with the sequencing, given that the site purported to bind Mr. Dohrmann to the terms after he signed in to the site. Accordingly, she concluded that the required inquiry notice was lacking.
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