On February 15, 2017, (the opinion is not yet final), the 4th District Court of Appeal in Vitacost.com, Inc. v. McCants, Fla Case No 4D16-3384, Fla 4th DCA, February 15, 2017), ruled upon the enforceability of an arbitration clause in a “browsewrap” internet agreement.
Most of us regularly purchase goods and services using the Internet. Have you ever thought of what you might have to go through if a dispute arises? Suppose you bought a large amount of dietary supplements from an internet supplier and you became very ill. Can you sue for damages? Can you return them for a refund? Are you out of luck? What is the law that applies to such sales?
There is not a large body of cold and hard appellate law to apply to anything involving the internet. So, finding any solid cases decided by appellate judges anywhere can be difficult if not impossible. Recently, the appellate courts in Florida have addressed an important concept. In a recent case, a buyer became ill after taking a dietary supplement purchased over the internet. When his lawyers sued the seller for damages in a claim for products liability, the seller attempted to “force” the case into arbitration. If the case had been removed to arbitration, the plaintiff would have had to start the case over and would have lost the right to a jury trial.
All of this revolved around how the contractual arbitration clause agreement contained in the internet ad was displayed to the consumer.
The court discussed the two types of agreements generally found in internet sales. The court noted the distinction between a “browsewrap” and “clickwrap” agreement. The “clickwrap” agreement directs a purchaser to the terms and conditions of the sale and requires the purchaser to click a box to acknowledge that they have read those terms and conditions. Such agreements are generally enforceable.
A “browsewrap” agreement happens when a website provides a link to the terms and conditions and does not require the purchaser to click an acknowledgement during the checkout process. These agreements have only been enforced when the purchaser has actual knowledge of the terms and conditions, or when the “hyperlink” to the terms and conditions is conspicuous enough to put a reasonably prudent person on notice.
The appellate court held that the seller’s webpages failed to advise the plaintiff that the purchase at issue was subject to certain terms and conditions requiring the arbitration process. The Court of Appeal found that the arbitration agreement at issue, was not sufficiently incorporated into the internet sales agreement and it was proper to deny the seller’s motion to compel arbitration.
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