Your first use of — or even visit to — an online service, whether on 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 service that control your relationship with the service provider also appear. For service providers, these agreements are essential because they allow them to onboard users without having to exchange signed agreements or collect special digital signatures. In recognition of this, courts enforce clickwrap and scrollwrap agreements which appropriately notify users of their terms.
The US Court of Appeals for the Second Circuit, in particular, examines the “design and content” of the interface, including the agreement, by considering whether a reasonable person would be made aware of the terms of the contract, either by presenting them , or by being made clear where they are and, once notified, continue to interface with the website or service in a way that shows their consent to the terms. Recently, the Second Circuit, in its decision in Zachman vs. Hudson Valley Federal Credit Union (21-999-cv, September 14, 2022), recalled that the question of whether the user was duly notified, even “notice of investigation”, of an agreement (or the terms of this agreement incorporated by reference from another web page), is very factual. The Second Circuit criticized the district court in that case for failing to review the design and content of the web page that presented the agreement to the user and to review the manner in which the terms were presented, and eventually overturned the district court’s judgment and sent the case back for review. how the agreement was presented on the website.
For website and service operators, the lesson is clear. It is not enough to have a user agreement, no matter how detailed. Rather, the agreement must be incorporated or clearly marked by the design and content of the web page or interface so that users are properly informed of the existence of the agreement and where they can consult its conditions. Failure to properly inform users of the Agreement will mean that they are not bound by its terms, including those regarding their use of the Website or Service, and the remedies they have against the Provider if they have a complaint.
©2022 Norris McLaughlin PA, All Rights ReservedNational Law Review, Volume XII, Number 280