“Reprinted with permission from the March 29, 2017 issue of Daily Business Review. ©2017 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reseved.”

In a case of first impression, Vitacost.com, Inc. v. James McCants, the Fourth District Court of Appeals upheld a trial court’s ruling that an arbitration clause, contained in an online vendor’s terms and conditions “broweswrap” agreement, was not sufficiently incorporated into an internet sale and was therefore unenforceable.

The product liability lawsuit arose out of a consumer’s purchase and consumption of dietary supplements from Vitacost.com, an internet dietary supplement vendor, which the consumer alleged caused liver damage. During the litigation, Vitacost.com sought to compel arbitration. The trial court refused to order the parties to arbitration, finding that the Plaintiff-consumer was not bound by the arbitration clause because Vitacost.com did not provide effective notice of the clause – contained within an inconspicuous “browsewrap” terms and conditions agreement on Vitacost.com’s website – during the online transaction. The Fourth District Court of Appeal agreed.

In reasoning its way to a holding consistent with the trials court’s, the Fourth DCA expounded on the distinction between “clickwrap” and “browsewrap” internet agreements. As outlined by the Fourth DCA, a “clickwrap” agreement is one in which the internet vendor requires consumers to affirmatively acknowledge that they have read the agreement, usually pertaining to terms and conditions of a sale, by clicking on a box. The type of agreement used by Vitacost.com, however – a “browsewrap” agreement – takes the form of a hyperlink situated on the web page and does not require any affirmative acknowledgement of the agreement by the consumer. The Fourth DCA, citing the Ninth Circuit, noted “clickwrap” agreements are generally enforceable. “Browsewrap” agreements, however, at least according to the Fourth DCA and the Ninth Circuit precedent upon which the appeals court relied, require greater scrutiny in evaluating enforceability.

In determining whether the Plaintiff-consumer should be bound by the arbitration clause contained within Vitacost.com’s “browsewrap” terms and conditions agreement, the Fourth DCA put the agreement under the microscope in order to dissect its inconspicuous nature. The Fourth DCA appears to have relied primarily on two distinct features of the agreement in finding that it lacked the requisite conspicuity. First, the Fourth DCA noted that the hyperlink was not visible unless the consumer scrolled to the bottom of the web page. This feature, in part, defined the inconspicuous nature of the agreement inasmuch as Fourth DCA precedent has deemed terms and conditions agreements “buried at the bottom of [a] [web] page” unenforceable. Second, the Fourth DCA noted that the terms and conditions web page to which the consumer was led via the hyperlink was devoid of any language describing the online sale as subject to the terms and conditions. The absence of “subject to” language contravenes Florida law, which requires that documents collateral to an agreement explicitly state that the collateral document is being incorporated into the agreement.

Ultimately, the Fourth DCA relied on a bedrock precept of contract law – the requirement that there be “mutual manifestation of assent” between the contracting parties – to find that the arbitration clause within the “browewrap” terms and conditions agreement was unenforceable. The Plaintiff-consumer was without constructive notice of the agreement given its inconspicuous nature and, consequently, did not assent to the agreement’s terms.

Vendors seeking to bind consumers to terms and conditions of an online sale would therefore be better served to implement the more generally enforceable “clickwrap” agreement or, in the alternative, take extra precautions to ensure that the “browsewrap” agreement is in front and center of the web page with explicit language referencing its incorporation into the online sale. Indeed, anyone who has ever purchased anything knows that a sale always includes fine print but, from a legal standpoint, it matters just how fine the fine print is.