“Clickwrap” and “scrollwrap” agreements pervade the modern internet
Your first use -- or even visit -- to an online service, whether at a website or in an app, will usually present you with a detailed user agreement. Often privacy notices, data notices, codes of conduct, and terms of use that will control your relationship with the service provider appear as well. For service providers, these agreements are vital, allowing them to onboard users without the need to exchange signed agreements or collect special digital signatures. In recognition of this, courts enforce clickwrap and scrollwrap agreements that appropriately notify users of their terms.
The Second Circuit Federal Court of Appeals, in particular, looks to the “design and content” of the interface including the agreement, asking whether a reasonable person would be placed on notice of the contract terms, either by being presented with them or by being clearly told where they are located, and once notified, continues to interface with the website or service in a way that shows their assent to the terms. The Second Circuit recently, in its decision in Zachman v. Hudson Valley Federal Credit Union (21-999-cv, September 14, 2022), reiterated that the question of whether the user was properly put on notice, even “inquiry notice,” of an agreement (or terms of that agreement incorporated by reference from another webpage), is highly fact-intensive. The Second Circuit criticized the District Court in that case for failing to review the design and content of the webpage that presented the agreement to the user and to examine how the terms were presented, and ultimately vacated the District Court’s judgment and returned the case for review of how the agreement was presented on the website.
For website and service operators, the lesson is clear. It is not sufficient just to have a user agreement, no matter how detailed. Rather, the agreement must be integrated into or clearly signposted by the design and content of the webpage or interface so that users are properly put on notice that the agreement exists and where they can review its terms. Failure to properly notice users of the agreement will mean they are not bound by its terms, including those regarding their use of the website or service, and what remedies they have against the provider if they have a complaint. If you are a website or service operator, please feel free to contact the intellectual property attorneys at Norris McLaughlin about your website’s terms, conditions, and policies.