Last week, the Southern District of New York followed a long line of precedent under New York law and upheld the enforceability of a website clickwrap agreement, granting a website operator's motion to compel arbitration pursuant to a clause contained in the agreement. (Whitt v. Prosper Funding LLC, 2015 WL 4254062 (S.D.N.Y. July 14, 2015)).
In Whitt, the defendant filed a motion to dismiss the plaintiff's lawsuit and compel arbitration pursuant to the terms of a website clickwrap agreement. The defendant ran a website that accepted loan applications and alleged that the plaintiff agreed to an arbitration provision in the website's "borrower registration agreement." The website required applicants to click a box adjacent to the following bolded text: "Clicking the box below constitutes your acceptance of . . . the borrower registration agreement." The term "borrower registration agreement" in the text was a blue, underlined hyperlink to the actual agreement. This acknowledgement appeared near the bottom of the webpage, immediately above a "Continue" button, and the applicant could not complete a loan application without clicking the box indicating acceptance of the agreement.
The defendant contended, among other things, that the plaintiff accepted the agreement and its arbitration provision when he applied for a loan through the website. The plaintiff countered that he was not even constructively aware of the terms of the agreement because it was only accessible via hyperlink.
The court held that the plaintiff at least had constructive knowledge of the terms of the agreement and had assented to them. The court cited to a long line of precedent under New York law where courts had previously enforced agreements which were only accessible via hyperlink and where such hyperlink was made apparent to the average user during registration.
On the other issue in the case, the question of whether the arbitration clause was unconscionable, the court held in favor of the defendant, finding that the clause was not unconscionable and was enforceable.
Clickwrap Agreement Available Only Through Hyperlink Enforceable Under New York Law
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