In Nguyen, the court reminded the parties that there are only two flavors of contracts formed on the Internet.
- Under “clickwrap” (or “click-through”) agreements, website users are required to click on an “I agree” box after being presented with a list of terms and conditions of use.
- Under “browse-wrap” agreements, a website’s terms and conditions of use are generally posted on the website via a hyperlink at the bottom of the page, but there is no functionality requiring the user to manifest assent to the terms and conditions expressly. Because there is no affirmative duty to express such assent, the determination of the validity of the browse-wrap contract depends on whether the user has actual or constructive knowledge of the website’s terms and conditions. (Such knowledge may be presented on the website or may be given later, in the form of a mailed notice of breach and demand for cure. Without such knowledge, there is no online contract.
A third solution might involve displaying a “Website Terms of Service” button that states “By clicking here, you are indicating that you have read and agree to the Terms of Service.”
The bottom line: “Whether a user has inquiry notice of a browsewrap agreement, in turn, depends on the design and content of the website and agreement’s webpage.” Slip opinion, p. 12. This decision invites everyone to review and perhaps to redesign the legal framework for their online website-based legal agreements.
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