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February 7, 2017 -

Usability vs. Enforceability – Trends in Enforcing Terms of Use

by Matthew Klahre and Jay Gantz

Some classic struggles will never end – yin vs. yang, Jedi vs. Sith, and UX vs. Legal (when it comes to the explicitness of a user’s acceptance of a website’s Terms of Service (“ToS”)).  A well-crafted ToS (especially one containing a mandatory arbitration provision) is a useful tool for an online business to use to manage various risks.  However, a ToS, like any other contract, requires formation.  Courts struggle to apply the principles of contract formation online, but often use a two-option test (or minor variation of it) – did the user actually have knowledge that they were accepting a ToS, or did the website operator display the ToS in such a way that would have put a reasonably prudent user on inquiry notice that they were accepting a ToS.

There is not one right answer, and each website operator needs to balance “friction” in its registration process with its risk tolerance.  However, we can distill some key principles from the cases in 2016 that addressed the issue.

There is a very high likelihood that a court will enforce a ToS where the user is forced through a separate, mandatory accept-the-terms page or popup as part of an account creation flow or similar process.  This procedure ensures that a user receives unavoidable notice regarding a ToS, and must agree to the ToS in order to make any further use of the website.  Courts favor this, as we saw in Tompkins v. 23AndMe,Inc.

There is a high likelihood that a court will enforce a ToS where the user clicks an “I Agree to the Terms & Conditions” (or similar) “call-to-action” button that unambiguously references the ToS as part of the UX flow, and where users have the ability to access the ToS on the page.  In 2016, we saw courts enforce ToS agreements in Moule v. UPS, Bekele v. Lyft, Selden v. Airbnb, Inc., Keena v. Groupon, Inc., and Cline v. Etsy, Inc., and in In re Facebook Biometric Information Privacy Litigation (although the ultimate outcome of this decision gets complicated for other reasons).  In each of these cases, users were required to click a button or check a box that included the words “agree” or “accept” and specifically referred to the ToS.   In each of these cases, the agree/accept button was positioned near a hyperlink or scroll box where users could access and review the ToS prior to clicking agree/accept.  This method of ToS implementation appears to be a well-accepted industry standard given its consistent enforceability in 2016 and the caliber of the defendant-companies in these decisions.

Courts may enforce a less-explicit call to action where repeat users are presented with the ToS hyperlinks numerous times.  In 2016, inflight internet and entertainment provider Gogo, Inc. was again dragged into court in the Eastern District of New York in Salameno v. Gogo Inc., facing another challenge to the enforceability of its ToS like the one faced in 2015 in Berkson v. Gogo, Inc.  In 2015, the court determined that Gogo’s ToS were not enforceable because users lacked adequate notice.  (Users were presented with two “Sign In” buttons, one of which did not have a call to action anywhere nearby.) Surprisingly, Gogo’s ToS were enforced the second time around because these particular users purchased and used the products so many times that they were repeatedly presented with the ToS hyperlinks (near a single “Sign In” button below the ToU hyperlink) and therefore should have known those terms applied, even though ”Sign In” was not an explicit call to action .  This is certainly not an ideal approach, but instead is an argument to be raised if a ToS is challenged before best practices can be implemented.

On the other hand, there is a low probability that courts will enforce a ToS where the call to action is not separate and distinct from the “next” (or similar) button in the UX flow.  A ToS was not enforced in Sgouros v. TransUnion LLC where the call to action read “I Accept and Continue to Step 3” because the button did not unambiguously pertain to the ToS.  Similarly, a ToS was not enforced in Nicosia v. Amazon, because while Amazon’s checkout screen cautioned users that “By placing your order, you agree to Amazon’s privacy notice and conditions of use,” nothing about the “Place Your Order” button suggested that additional terms would apply and the button was positioned too far away from the hyperlinked ToS to indicate that clicking it would amount to acceptance of the ToS.  For similar reasons, a judge declined to enforce Uber’s ToS in Meyer v. Kalanick because clicking the “Register” button in Uber’s sign-up flow did not explicitly indicate assent to the ToS, even though the text under the “Register” button advised users that “By creating an Uber account, you agree to the Terms of Service and Privacy Policy.”  (However, because reasonable minds can differ, a different court found the ToS in a similar registration flow enforceable in Cullinane v. Uber, where users clicked “Done” to complete their registration and accept Uber’s ToS.)

Unsurprisingly, courts have also declined to enforce a ToS where there is no call-to-action or similar button, but simply a hyperlink to the ToS positioned well below the fold.  This type of ToS implementation is especially offensive to courts where the size of the ToS hyperlinks are almost imperceptible relative to the overall website design, and where the font color blends in to the website’s background and surrounding copy.  The court took ProFlowers.com to task for exactly this in Long v. Provide Commerce, Inc., and declined to enforce its ToS.

While there is no one-size-fits all solution to ensuring a ToS is enforceable, there are several clear “dos and don’ts” established by these decisions that online service operators should keep in mind during UX design. If you are an online service operator and have questions about whether your terms of use are enforceable, please do not hesitate to contact us.