In 2011, Kevin Khoa Nguyen (“Nguyen”) purchased two HP Touchpads (HP’s failed competitor to the iPad) through barnesandnoble.com. The model was being discontinued, so Barnes & Noble was selling the remaining inventory at a discounted price. The next day, Barnes & Noble sent Nguyen an email stating that his order was being cancelled due to high demand. Nguyen sued as the lead plaintiff in a class action. His claim was that the cancellation of the sale prevented him from purchasing the product elsewhere at a similarly discounted price.
The court began its analysis by stating (quoting previous cases):
“While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract.” …One such principle is the requirement that “[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.”
That should give you a hint of where the court was going. They continued:
So: clickwrap agreements require the customer to click “I Agree” or something along those lines in order to proceed; browsewrap agreements are posted elsewhere on the website and don’t require any affirmative action by the consumer.
As you might expect at this point, the Court of Appeals upheld the District Court’s ruling in favor of Nguyen:
Barnes & Noble’s browsewrap agreement, with respect to the arbitration provision, was invalid. Barnes & Noble hasn’t lost the core of the case – whether or not Nguyen was damaged by their cancellation of the order – but in order to proceed, they’ll have to have an actual court trial (or appeal to the U.S. Supreme Court.)
Does this mean that every e-commerce website must force consumers to click “I Agree” before completing a transaction? Not necessarily. Note that the court did not rule that all browsewrap agreements are unenforceable: