When you click an “I Agree” checkbox is it a binding contract?
Whether you’re signing up for a new computer app, joining a social media platform or doing almost anything else on the web, it’s likely you can’t get there without passing an “I Agree” or “Confirm” checkbox.
Somewhere, whether you see it or not, the web wizards posted a bunch of small print. The legal terms exist to protect them, not you. You know that but you click and move on.
By clicking on the “I Agree” checkbox have you entered into a valid enforceable contract?
The answer depends on a couple of factors. How was the confirmation screen set up?
There are a couple of basic types of electronic contract-makers:
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Click-through
A clickthrough agreement, sometimes also called a ‘clickwrap’ comes up before you can use the app or other service. It presents a barrier you need to get through first before getting anywhere. The click-through page requires that you consent to any terms or conditions by clicking on a dialog box on the screen. But in this arrangement, you’re simply clicking on the box and you may or may not actually view the actual contract or terms of use to which you are granting assent.
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Scrollwrap
This arrangement actually makes you physically scroll through the wording of the contract or terms of use before arriving at the “I agree” or other tab. Notice I didn’t say anyone actually read the agreement. At the same time, the user actually sees the wording before clicking that they agree. The way courts see it people in this arrangement are at least on notice that the terms of the contract exist. They are forced to scroll through various terms, whether they read them or not, before clicking to the next thing.
Consider a case. A person who had used Uber before found that the ride share service updated their terms of service. He could not use the service without dealing with a pop-up that blocked access. The screen “encouraged” the user to read the new terms of service. Skipping past two hyperlinks to the new terms and a privacy notice the screen said:
“By checking the box, I have reviewed and agree to the Terms of Use and acknowledge the Privacy Notice.”
So, without actually clicking on the hyperlinks and reading the new terms, the user clicked “Agree”, thinking nothing of it.
By clicking “I Agree” are you bound to contract terms even if you don’t read them?
It turns out that our user friend above was a chef at a Boston restaurant. Five days after clicking through the screens he got out of work just after midnight and contacted Uber for a ride home to Somerville, just outside the city. So far so good. Except that the driver who showed up turned out to have a horrible driving record that included at least twenty driving violations on his driving rap sheet.
The driver told the chef he was happy to drive over to Somerville, there was less traffic outside the city, and that he could “fly around”. In fact, once out of Boston and inside Somerville, the car accelerated to a high rate of speed. At some point the driver swore, the car swerved back and forth and ended up crashing. The passenger, the chef who had just gotten out of a long day in the kitchen, struck his head and slumped over. He immediately knew he was paralyzed. In fact, he broke his neck.
As it turned out the passenger sustained a severe spinal cord injury in the crash. As a result of the severe car accident, he will be a quadriplegic for the rest of his life.
Lawsuit for injuries
Sued for the passenger’s injuries, Uber found itself facing the claim it should have known of the driver’s dangerous driving record. The suit claimed Uber placed customers at risk by failing to screen out the bad driver. That, the suit claimed, caused injuries in the car accident.
But Uber fought back. Their response countered that “you can’t sue us”. The terms of agreement, they said, specifically required that any and all claims be arbitrated out of court. That means, they said, no lawsuit. Users are prohibited from going to court and must resolve differences out of court, in arbitration.
Was the company right that the terms of service, which were never actually read in this case, bound the passenger?
Does clicking on an “I Agree” checkbox create a binding contract?
The only issue presented to the court was whether a binding contract was formed by clicking “confirm”. Was the passenger bound by an enforceable agreement not to sue? Did the simple click on a checkbox without actually reading the agreement deprive the injured person their day in court?
The court said two factors go into deciding whether those “I Agree” blocks bind one to a valid contract:
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Reasonable Notice
The bottom line does not require necessarily that the person actually read every word of the contract. Instead, the person must have reasonable notice that there are terms to which they will be bound. Is the online interface set up so that the person can easily access the terms? Is there “clarity and simplicity” in communicating the terms? Does the user have a reasonable opportunity to review the terms?
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Manifestation of Assent
Here the person must expressly and affirmatively manifest assent to the online agreement by clicking a box that the user agrees to the terms and conditions. The court requires “an expressly affirmative act” including the clicking of a checkbox that in effect alerts the user as to the significance of that act. As long as the user expressly takes such action the court feels they have reasonably manifested their assent.
In this case the court found Uber’s notice was unreasonable because they did not require users to even scroll through the terms and conditions. Potential customers could click through to the end without ever even linking to the actual terms and conditions.
The court concluded that the page design, which allowed but did not require the user to go to the Terms of Use before assenting “enabled, if not encouraged users to ignore the terms and conditions.”
In other words, nothing forced people to actually see the new terms and conditions. So, the court held that since customers could simply click through, without notice that they would be bound to certain terms, there was a failure to create an enforceable contract.
Use Caution Before Clicking Agree or Confirm
The answer to whether or not clicking “I Agree” creates a binding contract depends on specific facts and circumstances. People should always read everything before they agree. At the same time, the more difficult websites make it to go into the actual contract terms, the less likely it is that a contract is actually formed.
A final word on arbitration. This case centered around the injured person’s right to a day in court. That right in both criminal and civil cases is rooted in the U.S. Constitution and most state constitutions. At the same time there are times and there are cases in which arbitration and other alternative dispute resolution procedures present a good option. Alternative dispute resolution should be seriously considered in many cases. But the issue in this case was why should someone injured in a car accident be forced to waive their right to that day in court unwittingly.
The author of this article, Attorney Andrew D. Myers, represents personal injury clients in New Hampshire and Massachusetts. Serious injuries sustained in motor vehicle accidents or otherwise require serious representation. The Law Offices of Andrew D. Myers. Fighting the insurance company on behalf of injured clients.
Sources:
Good v. Uber Technologies, Middlesex County Massachusetts Superior Court, decided October 7, 2022.
Kauders v. Uber Technologies, Massachusetts Supreme Judicial Court, decided January 4, 2021.
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