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Monday, October 16, 2006

Online Clickthrough Agreements Upheld

In my Cyberlaw course, I argue to my students that the best way to form a valid online agreement is through a "mandatory non-leaky clickthrough" agreement.  By this, I mean that, to reach their destination, every user must go through a mandatory process that requires the user to affirmatively click that they are agreeing to the contract terms.  These contracts generally have fared well when considered by courts--at least, from a formation standpoint.  (See my list of online contract formation cases here).

For a textbook example of how the courts evaluate mandatory non-leaky clickthrough agreements, consider ESL Worldwide.com, Inc. v. Interland, Inc., 06-CV-2503 (S.D.N.Y. June 21, 2006).  In that case, a disgruntled customer sued a web host because the hosted website was allegedly offline for 7 months.  The web host moved to dismiss based on the forum selection clause in its contract.  The court says:

First, Shin may not remember click the icon, but Defendants' records reveal that he did, in fact, so click...Furthermore, because of the manner in which the website is organized, without having clicked "Accept," Shin would not have been allowed to access certain other sections of the site, and it is uncontested that Shin did enter those sections...Finally, the text above the "Accept" icon clearly states that by clicking "Accept," a user is bound to the new Terms of Services, and such terms, which include the forum selection clause, are easily accessed by clicking on the accompanying link.

As you can see, an airtight formation process makes it easy for the court.  Case dismissed.

Google recently won a similar outcome in Person v. Google, where Google successfully moved to change venues based on the venue selection clause in its mandatory clickthrough AdWords contract.  Person v. Google Inc., 2006 WL 2884444 (S.D.N.Y. Oct. 11, 2006).

[Eric Goldman]

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