Rounding Up Two Online Contract Formation Cases

Two more samples of what I’m seeing in the online contract formation caselaw. Reminder: if you’re using some variation of the “wrap” terminology, UR DOIN IT WRONG.

Phillips v. Neutron Holdings, Inc., 2019 WL 4861435 (N.D. Tex. Oct. 2, 2019).

Stoneking signed up for Lime, rode one of Lime’s e-scooters, fell off it, and died. His estate sued Lime. Lime invoked the arbitration clause in its user agreement. Like so many courts nowadays, the court says Lime’s contract formation wasn’t a clickwrap or browsewrap but instead a “hybrid of the two.” 🤮🤮🤮 “Like most clickwrap agreements, Lime does not present users with an ‘accept’ button or box. But unlike browsewrap agreements, Lime requires users to affirmatively click either the ‘NEXT’ or ‘Continue with Facebook’ button after being presented with a link to the User Agreement.” The court calls this a sign-in-wrap. 🤮🤮🤮 The court says:

the Court finds that the hyperlink to the User Agreement on Lime’s sign-up screen was reasonably conspicuous and placed Stoneking on notice of the User Agreement. The sign-up screen is visible on one page, and the hyperlink is “in close proximity” to the two sign-up buttons. Moreover, the notice is legible, and the hyperlinked words “User Agreement & Terms of Service” are in dark, bold font, making them stand out from both the white screen and the surrounding gray text. Based on these circumstances, a “reasonably prudent smartphone user” would understand that by signing up for Lime, he or she is assenting to the User Agreement.

That is enough to send the case to arbitration.

Mucciariello v. Viator, Inc., 2019 WL 4727896 (D.N.J. Sept. 27, 2019).

The plaintiff booked an ATV tour in Mexico via Viator, which is owned by TripAdvisor. On the ATV tour, the plaintiff fell off the ATV and injured her wrist. She sued Viator and TripAdvisor in New Jersey. The defendants invoke the forum selection clause in Viator’s Terms and Conditions to move the case to Massachusetts. The plaintiff invoked the old Second Circuit Specht case, but the court says it doesn’t apply:

Specht is distinguishable based on the conspicuous placement of the hyperlinked Terms and Conditions on Viator’s website, in relation to the icon which Plaintiff was required to click in order to effectuate her purchase of the ATV Tour. In addition, the statement which accompanied the hyperlink explicitly informed Plaintiff that, by clicking on the “Book Now” icon, she was assenting to Viator’s Terms and Conditions. Plaintiff was not required to visit another webpage, in order to understand that a binding contract was created upon confirming her purchase of the ATV Tour, nor did she have to click on multiple hyperlinks, before accessing the forum selection clause in Viator’s Terms and Conditions. Thus, unlike the defendant in Specht, Defendants, here, provided reasonable notice of their Terms and Conditions.

The plaintiff argued that the link to the T&Cs were several screens below the fold. That fact, in isolation, doesn’t help. “To the extent that Plaintiff contends that the Terms and Conditions should be deemed invalid, merely because she was required to scroll down in order for the hyperlink to appear, this position is specious.”

Instead, the court upholds enforcement:

The hyperlinked terms on Viator’s website adhere to the requirements of reasonable notice. Regardless of whether Plaintiff was required to scroll through the Check Out page, the hyperlinked Terms and Conditions, as stated, were conspicuously placed directly underneath the “Book Now” icon. Based on its location, therefore, the hyperlink was not hidden in an area of the screen that Plaintiff was unlikely to notice, but, instead, it was clearly displayed in a section of the webpage that she needed to review in order to effectuate her purchase of the ATV Tour. Stated differently, the hyperlink was placed within the immediate proximity of an icon that Plaintiff was required to click, for the purpose of confirming her purchase on Viator’s website. Crucially, counsel’s screenshot was taken with the benefit of hindsight, and, although it reveals that it is possible to purchase a product without viewing the Terms and Conditions, such a result is improbable. Indeed, users, unlike counsel, are not attempting to willfully evade the hyperlinked Terms and Conditions on Viator’s checkout page, nor manipulate their web browser so that the “Book Now” icon is displayed, without the hyperlinked Terms and Conditions underneath. Indeed, that a user would purposefully stop the web browser, at the precise point at which the “Book Now” icon ends, defies logic.