Courts Click “I Agree” on Clickwrap Arbitration Agreements
April showers bring May flowers – and pro-clickwrap case law. Two courts upheld mandatory arbitration provisions to force putative class actions out of court.
The Massachusetts Appeals Court affirmed a ruling upholding an arbitration provision presented to users as they registered for an event. In Pazol v. Tough Mudder, Inc., the registration website required users to scroll through an agreement containing a variety of terms including the mandatory arbitration provision. In order to complete registration for the “Mudderella Boston” event, users had to check a box declaring “I agree to the above waiver.” The court rejected the plaintiff’s claim that the arbitration provision was unconscionable based largely on three facts: (1) the “agreement was preceded by a conspicuous, clearly-worded, all-caps header;” (2) the arbitration provision itself was only one paragraph long and written in clear language; and (3) the user had to take the affirmative step of checking the box. Thus, the court concluded, there was no indication of “unfair surprise or oppressive formation.”
The Superior Court of Santa Clara County, California came to a similar conclusion in Nathan v. Symantec Corp. The class plaintiff asserted that he did not agree to the mandatory arbitration provision in Symantec’s End User License Agreement when he placed an order. Symantec demonstrated that before completing his purchase, plaintiff was on a webpage that stated, “By clicking Agree and Place Your Order, you are . . . agreeing to the End User License Agreement . . . .” The term End User License Agreement was orange, not black like the rest of the text, and was hyperlinked to the agreement in question. The court found that this text made it “readily apparent . . . that clicking the button meant plaintiff agreed to the license agreement” containing the arbitration provision and that plaintiff’s affirmative step of clicking on the button manifested the consent necessary for contract formation.
The cases may demonstrate that courts are growing more comfortable with binding consumers to mandatory arbitration provisions when they have affirmatively assented to terms during a registration or purchase process. Clear clickwrap processes seem to be particularly persuasive to courts, so companies should ensure that clickwrap agreements are presented with straightforward language indicating that clicking an “agree” button equals agreement to the applicable terms.