The Ninth Circuit deals with website design for enforceable terms of use | Perkins Coie


Many companies use browsewrap or related sign-in agreements to present their terms of service for consumer acceptance. On April 5, 2022, the US Court of Appeals for the Ninth Circuit refined the standard for enforcing terms of use presented on hyperlinked websites. The decision affects how companies should design their websites and present their terms of use to ensure that those terms—including their accompanying arbitration agreements, class action waivers, product licenses, and warranty disclaimers—are enforceable.

In Berman v Freedom Financial Network, LLC, — F.4th —-, 2022 WL 1010531 (9th Cir. Apr. 5, 2022), the Ninth Circuit considered whether consumers are bound by the terms of service displayed via a hyperlink included in the same gray Font as displayed surrounding larger text and appearing to be accepted by selecting a green “continue” button near a statement that the consumer has understood and agreed to the terms. The court ruled that these features did not sufficiently inform consumers that they agreed to the terms. As a result, no agreement was reached between the company and the consumers, including no agreement to settle their disputes.

Berman first reaffirmed the core principles that hyperlinked terms of use are enforceable if the website (1) “reasonably prominently displays the terms” and (2) prompts the consumer to take steps to show unequivocal acceptance of the terms.

but Berman has affirmed more than just these principles. The decision also identified specific website design features that are inadequate and that companies should use to create enforceable agreements.

In order to properly inform consumers about the terms of service, a website must “do more than just underline the linked text”. The court stated that a hyperlink presented with “a contrasting font color (usually blue) and the use of all capital letters” may sufficiently alert consumers to the terms of service. Businesses should also pay attention to the rest of the webpage, as “other visual elements” could “distract” the user’s attention from the notice and render the agreement unenforceable.

In order for consumers to agree to terms, the website must also “explicitly notify a user of the legal implications of the promotion [they] must meet in order to enter into a contractual agreement.” The court stated that consumers who click on a button must be “explicitly informed that clicking constitutes acceptance of the terms”. Per Bermanit is not sufficient to place a statement of the terms near a button that the consumer selects to continue, especially if the text of the button does not indicate that using the button expresses acceptance of the terms.

Consumer disputes are rife in the Ninth Circuit, even for companies headquartered in other jurisdictions. In the light of BermanBusinesses are encouraged to hire an attorney to review their website design and present their Terms of Use and make any necessary updates.

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