Placement Of Checkbox Can Make Or Break A Clickwrap Agreement

Richard Raysman is a Partner in Holland & Knight's New York office

The enforceability of a wrap agreement (browsewrap, clickwrap and shrinkwrap) can often turn on what to the untrained eye may be mere minutiae. Such minutiae can include the nuances of the design of a website. For example, in Friedman v. Guthy-Renker LLC, No. 2:14-cv-06009-ODW, 2015 WL 857800 (C.D. Cal. Feb. 27, 2015), a recent case from the Central District of California, the court was faced with objections to a website's browsewrap agreement. As the decision ultimately illustrated, the enforceability of these agreements can depend at least in part on the location of text relative to a checkbox a customer must click in order to manifest the requisite assent.

Facts

In a putative class action, the plaintiffs, including Amy Friedman (Friedman) and Krystal Henry-McArthur (Henry-McArthur), sued Guthy-Renker, a "direct marketing" corporation for allegedly selling them conditioner (WEN) that caused each of the plaintiff's hair to fall out. Specifically, they alleged that the hair loss caused by WEN was the result of a design and/or manufacturing defect. According to these plaintiffs, such a defect raised seven causes of action, including, inter alia, breach of warranty, strict products liability, and failure to warn negligence.

Guthy-Renker responded in its Motion to Dismiss by averring that its website Terms and Conditions, and the binding arbitration and class action waiver clauses contained therein, precluded the sort of litigation attempted by Friedman, Henry-McArthur, and the other plaintiffs. Assent to such Terms and Conditions required customers to "click[] an interactive check box" on the final checkout screen. Neither Friedman nor Henry-McArthur disputed that they had (1) clicked the interactive check box, nor (2) that the Terms and Conditions included class action waiver and binding arbitration clauses. Rather, these plaintiffs alleged that clicking the interactive check box did not constitute a manifest of knowing assent to such clauses.

Ultimately, the court arrived at opposite conclusions for the two plaintiffs named above, largely premised on the differences in the structure and design of Guthy-Renker's website at the time each respective purchase was made. See Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014) (holding that often website design can dictate the validity of an online contract) Therefore, a detailed explanation of the design of the pages of...