Some comments of an Illinois appeals court in a recent decision upholding the mandatory arbitration provisions of a browsewrap agreement offer more positive signs that courts are increasingly expecting common sense of browsers.
The blue hyperlink entitled “Terms and Conditions of Sale” appeared on numerous Web pages the plaintiffs completed in the ordering process. The blue hyperlinks for the “Terms and Conditions of Sale” also appeared on the defendant’s marketing Web pages, copies of which the plaintiffs attached to their complaint. The blue hyperlinks on the defendant’s Web pages, constituting the five-step process for ordering the computers, should be treated the same as a multipage written paper contract. The blue hyperlink simply takes a person to another page of the contract, similar to turning the page of a written paper contract. Although there is no conspicuousness requirement, the hyperlink’s contrasting blue type makes it conspicuous. Common sense dictates that because the plaintiffs were purchasing computers online, they were not novices when using computers. A person using a computer quickly learns that more information is available by clicking on a blue hyperlink. [emphasis added]
In the case buyers who purchased over the internet were bound to the provisions even though they did not have to read the provisions in order to complete the sale – the visibility of a link to the provisions was adequate.
Note that Section 7(2) of the new Ontario Consumer Protection Act (which I blogged in April) does not permit a supplier to require consumers to resolve disputes by arbitration: “any term or acknowledgment in a consumer agreement or a related agreement that requires or has the effect of requiring that disputes arising out of the consumer agreement be submitted to arbitration is invalid insofar as it prevents a consumer from exercising a right to commence an action in the Superior Court of Justice given under this Act”. The Act also requires that online merchants provide specified disclosure to consumers, and that the disclosure be “clear, comprehensible and prominent”. Will the prominence requirement be intrepreted to allow the use of hyperlinked terms and conditions?
The arbitration provisions of the new Act overturn the 2002 decision of the Ontario Superior Court in Kanitz v. Rogers Cable Inc. that allowed a mandatory arbitration clause. In the Rogers case Justice Nordheimer quoted from Ontario Superior Court Justice Winkler in the 1999 Rudder v. Microsoft Corp. case as follows:
All of the terms of the Agreement are displayed in the same format. Although, there are certain terms of the Agreement displayed entirely in upper-case letters, there are no physical differences which make a particular term of the agreement more difficult to read than any other term. In other words, there is no fine print as that term would be defined in a written document. The terms are set out in plain language, absent words that are commonly referred to as ‘legalese’. Admittedly, the entire Agreement cannot be displayed at once on the computer screen, but this is not materially different from a multi-page written document which requires a party to turn the pages.
Even though Kanitz has now been effectively overturned, it will be interesting to see how the Courts interpret the new Act’s disclosure requirements in the case of online agreements.
Via Contracts Prof Blog.