Let’s be honest. You don’t read the fine print before signing up for or buying something online. Unless you’ve sued a company, you’ve never taken the time to look through its website, find its terms, and pore over them. Courts have taken notice of this. “Browsewrap” terms—so called because one browses a website to find them, but need not affirmatively assent—are under strain. Following recent case law, it is increasingly necessary to obtain affirmative consent from the site’s visitor to bind them to terms—so-called “click-wrap” agreement.
Below, I break down some recent developments with browsewrap caselaw and some best practices when operating a website.
Background
Since the advent of the internet, courts have grappled with what constitutes contract formation in an online context. Here are a few important cases on this subject.
Amongst the earliest cases to address this was Ticketmaster Corp., et al. v. Tickets.Com, Inc., 2003 U.S. Dist. Lexis 6483 (C.D. Cal. March 7, 2003). The Ticketmaster case concerned whether Tickets.com had violated Ticketmaster’s terms of use—which were buried on its website—by displaying ticketing content without permission. Judge Harry Hupp held that Ticketmaster’s browsewrap terms of use were not binding on Tickets.com because there was no evidence site users had actual or constructive knowledge of them. In granting the motion to dismiss, Judge Hupp stated that, “[i]t cannot be said that merely putting the terms and conditions in this fashion necessarily creates a contract with any one using the web site.” The key takeaway is that simply posting the terms online is insufficient.
Another early case tackling browsewraps was Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002). The Specht court found that merely clicking a software download button was not sufficient consent with its license terms, which were linked below. Writing for the unanimous majority, Circuit Judge (now Justice) Sotomayor held that “[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility.” [emphasis added]. Specht also provided a test for enforceability of online contracts: whether “a reasonably prudent offeree…would [] have known or learned, prior to acting…” of the terms to which the offeree was agreeing.
The 9th Circuit addressed the question of browsewrap enforceability more recently in 2014. In Nguyen v Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014). Plaintiffs brought suit against Barnes & Noble for its “fire sales” of Hewlett-Packard touchpads, which were subject to onerous terms enabling Barnes & Noble to cancel orders based on unexpectedly high demand. The terms contained arbitration clauses, which Barnes & Noble invoked seeking to dismiss the class-action litigation. In finding the arbitration clause invalid, the 9th Circuit distinguished between actual and constructive notice, finding no evidence that Nguyen had actual notice of the terms containing the arbitration agreement. The 9th Circuit thus invalidated the arbitration provision, setting a precedent for future website designs to include checkboxes affirming consent.
Since Nguyen v. Barnes, courts have gone further. In Chabolla v. ClassPass, Inc. (9th Cir., Feb 2025), the 9th Circuit ruled that ClassPass’s “sign-in wrap” design (multiple pages stating users agree to terms by continuing) failed to provide reasonably conspicuous notice and thus was unenforceable as an arbitration agreement. In Berman v. Freedom Financial Network, LLC (9th Cir., April 2022), the 9th Circuit found that even clickwrap terms could be unenforceable if they failed to provide clear notice of significant rights waivers (like arbitration). The Berman court also found that consent must be tied to a specific, knowing act and that general consent is insufficient. Together, these decisions highlight the 9th Circuit’s growing insistence that online agreements provide not just affirmative consent, but conspicuous and informed consent.
In sum, the caselaw has made clear the risk to relying on terms that are merely visible on a website. Courts may be reluctant to enforce terms absent a clear manifestation of consent, particularly against consumers (HERE is a good law review article by Mark Lemley on the subject). This parallels with increased FTC focus on deceptive consumer trade practices. Since Nguyen v. Barnes & Noble, sophisticated companies have taken steps to redesign their websites and apps to make terms more enforceable, including through the use of “scrollwrap” agreements. While there is cost in increased friction, it pales in comparison to the cost of an unenforceable agreement.
Here are a few steps businesses can take for more enforceable terms:
- Always require affirmative consent. Even terms easily-accessible via links may not be enforceable if agreeing to the linked terms is not required. Checkboxes or “I agree” buttons are the gold standard. For evidentiary purposes, businesses should also have a recording of the click or check with a timestamp.
- Require reading of terms. Affirmative assent is usually necessary but may not be sufficient. If a consumer claims a lack of actual knowledge of the terms, enforceability may be an issue. Sophisticated businesses require customers to actually browse terms before they are able to click a checkbox or “I agree” button. This can be via a popup, drop-down menu. click-through pages or another transparent design choice.
- Make terms legible. This could be the subject of a future blog post, but any click-wrapped terms should be of sufficient size (ideally 12pt font) and, to the extent possible, avoid legalese or jargon that is unintelligible to the average consumer. In light of Berman v. Freedom Financial Network, businesses should also ensure that rights waivers, such as arbitration clauses, are highlighted in plain language.
There are many aspects of business we can’t change. Competition, tariffs, macro-conditions, changes to technology, and changes to laws. One thing we easily can change is the enforceability of our online terms. By giving sufficient notice and requiring affirmative consent, we give ourselves a much higher chance of having our preferred terms enforced.
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Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading or interacting with this content does not create an attorney–client relationship. You should consult a qualified attorney for advice regarding your specific situation. Mehaffy, PLLC disclaims all liability for actions taken or not taken based on this blog.