Courts continue to grapple with the enforceability of online agreements. While courts generally enforce clickwrap agreements—online agreements where users affirmatively show their acceptance after being presented with the terms, usually by clicking "I agree"—browsewrap agreements have stood on shakier enforceability grounds. Browsewrap agreements are online terms that, unlike a clickwrap agreement, do not require any affirmative indication of consent. Indeed, users can often continue using a website without ever viewing the terms of a browsewrap agreement, or possibly even knowing they exist. As the Northern District of California's decision in Alejandro Gutierrez v. FriendFinder Networks Inc. demonstrates, browsewrap agreements are not always unenforceable, but reaching such a determination can be a highly fact-specific inquiry requiring significant discovery—including discovery of offline activities, such as phonecalls between the user and the online service provider.
Gutierrez began using AFF at least as early as July 2003, and continued using it for over a decade. Throughout this time, he provided personal information to AFF, including his name, address, credit card information, and photos.
Gutierrez alleges that, in October 2016, someone hacked AFF's systems and downloaded the personal information of 339 million AFF users. Based on this security breach, Gutierrez brought a putative class action in the federal district court of the Northern District of California against FriendFinder Networks, Inc. ("FriendFinder"), which owns and operates AFF. FriendFinder sought to dismiss the action and compel arbitration, based on the arbitration provision in the Terms. Gutierrez argued that he was not bound by the arbitration provision, because he never agreed to the Terms.
Ultimately, the court found that Gutierrez did in fact agree to the Terms, despite the absence of evidence that he had ever viewed them, and granted FriendFinder's motion to compel arbitration. According to the court, the Terms could be considered a browsewrap agreement because AFF did not require users to expressly indicate consent, or visit any page containing the Terms, before registering and using the site. Although browsewrap agreements are rarely enforced, the court found that the Terms were enforceable against Gutierrez in this instance. According to the court, Gutierrez was on inquiry notice that his continued use of the site would constitute an indication of his intent to be bound, and Gutierrez in fact gave such an indication by using the site after receiving the notice.
Although the court ultimately enforced AFF's browsewrap terms, this case should still be a warning to website operators about the risks of using browsewrap agreements. The court could have reached a different decision if the plaintiff hadn't had a separate customer support call that mentioned the Terms, or if FriendFinder had been unable to produce evidence of the call.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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