Wrap agreements continue to present challenges. I don’t often write about district court decisions, and particularly not unpublished ones, but a recent case out of Illinois warrants an exception. (See earlier considerations of wrap arbitration agreements on this blog hereand here.)
Just as a quick refresher about wrap agreements, courts have refocused the notion of mutual assent on whether a reasonable person in the position of the recipient of boilerplate should have seen the terms and conditions of the proposed deal. If so, the recipient will be bound by those terms, regardless of whether she ever actually read or understood them. Constructive awareness coupled with an individual purchasing something from a commercial party amounts to assent. The trouble has been determining when an individual is made “constructively aware” of terms.
(I shouldn’t be too cavalier. The trouble may also be that boilerplate contracting shouldn’t count as contracting at all. In fact, the debates about the propriety of boilerplate have been raging for years. For instance, right now there’s a hot battle taking place over the proposed Restatement of Consumer Contracts. I won’t recap all of the vociferous debates, but if you’re interested, you can find a point of entry here (discussing the objections of 23 state attorneys general to the draft Restatement).)
In Anand v. Heath, et al., 2019 WL 2716213 (N.D. Ill. June 28, 2019), the court jumps into the fray by considering what it described as a “hybridwrap” arbitration agreement. According to the court, “[h]ybridwrap agreements typically prompt the user to manifest assent after ‘merely present[ing] the user with a hyperlink to the terms and conditions, rather than displaying the terms themselves.’” This typology situates “hybridwrap” agreements somewhere between clickwrap agreements, which present users with terms and conditions and then requires them to click that they agree to be bound by these terms, and browsewrap agreements, which merely provide a link to terms and conditions of use at the bottom of a page and assume that continued use of the site constitutes assent.
The court goes on to refuse to enforce the hybridwrap arbitration agreement before it. The rationale underlying the decision seems to be that the button manifesting assent to the terms and conditions wasn’t clearly connected to the actual terms and conditions. The problem wasn’t just that the hyperlink to the terms and conditions was distant from the “Continue” button; it was also that there was no indication that clicking the “Continue” button was signifying agreement to the hyperlinked terms and conditions.
What’s interesting to me about the typology and rationale discussed by the Anand court is that it seems to bear at least a family resemblance to the “coupling” principle discussed in Starke v. SquareTrade, Inc., No. 17-2474, 2019 WL 149628 (2d Cir. Jan. 10, 2019). (I wrote about Starke here.) Basically, in Starke, the Second Circuit refused to enforce an arbitration agreement in part because the relevant hyperlink was “neither spatially nor temporally coupled with the transaction.”
I’m not sure that I would say that there’s a trend developing here, but I appreciate that the courts in both Starke and Anandare trying to render the concept conspicuousness more concrete. The closer the temporal and spatial relationship between the mechanism signifying assent – an “I agree” button, for instance – and the terms, the more likely a court seems to be to enforce the terms.
The moral of the story: if you are writing boilerplate arbitration contracts in a wrap environment, I’d be reevaluating the degree of linkage between terms and conditions and the mechanisms for signaling assent.