Jeffrey H. Dasteel of UCLA has written CONSUMER CLICK ARBITRATION: A REVIEW OF ONLINE CONSUMER ARBITRATION AGREEMENTS, 9 Arbitration Law Review 1 (2017).  Here is an excerpt from the conclusion:

Our review of websites with arbitration clauses, in-store transactions for retailers with brick and mortar outlets and online sales, and prior studies on whether online consumers review terms and conditions has led us to three basic conclusions regarding the quality of notice provided to consumers. First, the prior studies on whether consumers review online terms and conditions establish that actual notice of the arbitration clause in a set of online terms and conditions is the very rare exception. Instead, for purposes of contract formation, online providers of goods and services must rely on constructive notice.

* * *

With regard to clickwrap websites, the websites that show the terms and conditions on the same screen where the consumer is required to click a box accepting the terms and conditions provide more robust notice than the websites that require the consumer to click on a box accepting terms and conditions, but the terms and conditions are only available by hyperlink. The more robust notice certainly provides the consumer with reasonable notice that there are terms and conditions associated with the transaction. However, notification that there are terms and conditions associated with the transaction does not let the consumer know whether there is a separable arbitration agreement included within those terms and conditions.

Based on the studies showing that consumers do not click on terms and conditions and do not scroll through on-screen boxes that include the terms and conditions, we see no fundamental difference between the quality of notice provided in browsewrap and clickwrap websites regarding the existence of an arbitration requirement, except where the clickwrap terms and conditions include the arbitration warning in the same location as the requirement to accept the terms and conditions. This follows from the fact that regardless of whether a consumer is required to actively accept terms and conditions, consumers do not go through the further work to click on the terms and conditions hyperlink or to scroll through extensive terms and conditions to reach the dispute resolution clause. * * *

* * *

In the end, what is unsatisfactory about the current state of the law on enforcement of online arbitration clauses is that courts find it is sufficient to put a consumer on constructive notice of arbitration if the consumer must actively accept terms and conditions even though (1) the arbitration clause is hard to find in that it is hidden behind a hyperlink and preceded by myriad terms and conditions in a scrollable box, and (2) virtually no one goes through the effort of searching out the terms and conditions or scrolling through the box before completing the purchase. For a paper transaction, the arbitration clause must be conspicuous. For an online transaction, the consumer is supposed to go on a treasure hunt to find it.

(HT: Gregory Gauthier)


Leave a Reply

Your email address will not be published. Required fields are marked *