25 August 2014
In the three years since AT&T Mobility LLC v. Concepcion, courts have largely been rejecting substantive attacks on arbitration agreements that waive class actions. By contrast, in some cases plaintiffs have succeeded in avoiding arbitration by arguing that they never agreed to it in the first place.
In the opinion, the Ninth Circuit distinguished between the familiar “clickwrap” process—in which a user affirmatively accepts terms by, for example, clicking “I agree” after receiving notice of the terms—and “browsewrap,” in which a company makes the relevant terms available to users on the web site (usually by providing a hyperlink), but does not require a customer to record his or her assent to the terms.
Nonetheless, Nguyen is likely to have a significant impact on the enforceability of online contracts, both in the Ninth Circuit and elsewhere. Accordingly, businesses may wish to consider reviewing their online contracting processes; in many cases, it may be relatively straightforward to adopt changes that satisfy the Nguyen court’s concerns.
This analysis originally appeared on Mayer Brown’s Class Defense Blog.