A recent decision by the United States Court of Appeals for the Ninth Circuit reinforces the importance of obtaining affirmative user consent to website Terms of Use for website owners seeking to enforce those terms against consumers. In Nguyen v. Barnes & Noble Inc., the Ninth Circuit held that Barnes & Noble’s website Terms of Use (“Terms”) were not enforceable against a consumer because the website failed to provide sufficient notice of the Terms, despite having placed conspicuous hyperlinks to the Terms throughout the website.

In Nguyen, the plaintiff filed a class action suit against Barnes & Noble for deceptive business practices and false advertising after the retailer cancelled the plaintiff’s online purchase. Barnes & Noble sought to remove the action from federal court to arbitration, relying on a binding arbitration provision contained in the website’s Terms.

The Ninth Circuit refused to enforce the arbitration clause in the Terms, finding that the plaintiff neither affirmatively assented to the Terms, nor did he have constructive notice of such Terms. Unlike “clickwrap” agreements that require users to affirmatively manifest assent (e.g., by clicking on an “I agree” button), the Barnes & Noble Terms were presented in “browsewrap” form – no affirmative manifestation of assent was required for the plaintiff to complete the online transaction. The court also determined that placing hyperlinks to the Terms at the bottom of each page of the website, without providing further notice or prompting the user to take some additional action to show intent, did not provide sufficient notice of the Terms to make them enforceable against the plaintiff.

Read the full Client Alert on the Ninth Circuit’s decision.