Source: https://www.ptaylorlegal.com/new-blog/2017/10/20/websiteapplication-design-and-the-enforceability-of-user-agreements
Timestamp: 2019-04-18 20:19:49+00:00

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A user agreement is intended to be a contract between the website/application operator and its users. Unlike a typical contract, however, where the parties would normally sign to indicate their agreement to the terms (i.e., assent), web agreements do not always capture such express indications of approval. Courts have, nonetheless, been willing to recognize a binding contract where the user agreement is presented in a clear and conspicuous fashion and the user’s actions reasonably indicate an agreement to be bound. Thus, an uncluttered website/application design plays an important role in ensuring the enforceability of a user agreement.
“While new commerce on the internet [and elsewhere] has exposed courts to many new situations, it has not fundamentally changed the principles of contract [law].” In determining whether a user agreement forms a binding contract, courts will typically consider: (i) whether there was actual or constructive knowledge of the user agreement’s terms; and (ii) whether the user’s actions sufficiently manifested assent to be bound.
Constructive knowledge differs from actual knowledge in that a user does not necessarily know what the exact terms may be, but was given sufficient notice to be able to discover those terms if they so choose. Courts consider the clarity and conspicuousness of the terms important in determining whether a user had constructive notice.
The Second Circuit, in the Schnabel case, also refused to find constructive notice of terms sent in an unsolicited email after the user’s initial enrollment. The Second Circuit reasoned that because the terms were “both temporally and spatially decoupled” from the initial enrollment and use of the service, a reasonable person would not be expected to connect the email with the potential contractual relationship with the service provider.
Although one cannot predict how a Court will decide any particular case, it seems that courts in the Second Circuit will be more likely to find constructive notice of a user agreement where the website/application design clearly provides notice of those terms at the same time and in the same space as the user’s interaction with the interface.
· Clickwrap: User is required to click an “I agree” box or button, but does not necessarily view the terms. Court have also generally found clickwrap agreements enforceable because requiring a physical act of acceptance puts a user on constructive notice.
· Sign-in-wraps: User is notified that they are agreeing to terms by registering or signing up. Courts have generally found well-designed sign-in-wrap agreements to be enforceable. However, more attention needs to be paid to the clarity of design to ameliorate the likelihood of enforceability.
· Browserwrap: hyperlink provided at the bottom of the screen with use of website/application demonstrating assent. Court have generally only enforced browserwrap agreements against corporations, not individuals.
In Uber, the Second Circuit found that the user “unambiguously manifested his assent” because “[a] reasonable user would know that by clicking the registration button, he was agreeing to the terms and conditions accessible via the hyperlink, whether he clicked on the hyperlink or not.”  However, the Second Circuit was not willing to find assent in Schnabel where the users continued to make payments through an auto-debit on their credit cards, which were too passive to indicate a subjective understanding of the terms and an intent to be bound in exchange for the continued benefits offered by the service.
· Scrollwrap provides the greatest assurance of creating an enforceable contract with users.
· Website/application design should aim to provide an uncluttered experience so that there is clear and conspicuous notice of the user agreement.
· If hyperlinks are used with sign-in-wrap-like agreements they should be presented conspicuously, at the same time and in close proximity to the relevant action button.
 Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir. 2004).
 See generally Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017); Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016).
 Schnabel v. Trilegiant Corp., 697 F.3d 110, 120 (2d Cir. 2012) (citing Specht v. Netscape Communs, Corp., 306 F.3d 17, 30 (2d Cir. 2002)). Other considerations include the history of dealings between the parties and industry practices. Schnabel, 697 F.3d at 124.
 Uber, 868 F.3d at 78 (quote altered to show hyperlinks as they appear in Uber application).
 Nicosia, 834 F.3d at 237.
 Schnabel, 697 F.3d at 127.
 Schnabel, 697 F.3d at 128 (citing Register.com, 356 F.3d at 403).
 Applebaum v. Lyft, Inc., 2017 U.S. Dist. LEXIS 99389, *16 (S.D.N.Y. June 26, 2017) (citation omitted).
 Id. at *16-17 (citing Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 397 (E.D.N.Y. 2015)).
 See, e.g., Uber, 868 F.3d at 80; Fteja v. Facebook, Inc., 841 F. Supp. 2d 829, 841 (S.D.N.Y. 2012).
 See, e.g., Lyft, 2017 U.S. Dist. LEXIS 99389, *18-25 (discussing previous design iteration which would not have adequately put users on notice of the terms of service).
 See Uber, 868 F.3d at 75-76.
 See, e.g., Berkson, 97 F. Supp. 3d at 396 (citing cases).
 Schnabel, 697 F.3d at 128-29.

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