Last week, the Southern District of New York followed a long line of precedent under New York law and upheld the enforceability of a website clickwrap agreement, granting a website operator’s motion to compel arbitration pursuant to a clause contained in the agreement. (Whitt v. Prosper Funding LLC, 2015 WL 4254062 (S.D.N.Y. July 14, 2015)).

In Whitt, the defendant filed a motion to dismiss the plaintiff’s lawsuit and compel arbitration pursuant to the terms of a website clickwrap agreement.  The defendant ran a website that accepted loan applications and alleged that the plaintiff agreed to an arbitration provision in the website’s “borrower registration agreement.”  The website required applicants to click a box adjacent to the following bolded text: “Clicking the box below constitutes your acceptance of . . . the borrower registration agreement.”  The term “borrower registration agreement” in the text was a blue, underlined hyperlink to the actual agreement.  This acknowledgement appeared near the bottom of the webpage, immediately above a “Continue” button, and the applicant could not complete a loan application without clicking the box indicating acceptance of the agreement.

The defendant contended, among other things, that the plaintiff accepted the agreement and its arbitration provision when he applied for a loan through the website. The plaintiff countered that he was not even constructively aware of the terms of the agreement because it was only accessible via hyperlink.

The court held that the plaintiff at least had constructive knowledge of the terms of the agreement and had assented to them.  The court cited to a long line of precedent under New York law where courts had previously enforced agreements which were only accessible via hyperlink and where such hyperlink was made apparent to the average user during registration.

On the other issue in the case, the question of whether the arbitration clause was unconscionable, the court held in favor of the defendant, finding that the clause was not unconscionable and was enforceable.

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Photo of Jeffrey Neuburger Jeffrey Neuburger

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise…

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise, combined with his professional experience at General Electric and academic experience in computer science, makes him a leader in the field.

As one of the architects of the technology law discipline, Jeff continues to lead on a range of business-critical transactions involving the use of emerging technology and distribution methods. For example, Jeff has become one of the foremost private practice lawyers in the country for the implementation of blockchain-based technology solutions, helping clients in a wide variety of industries capture the business opportunities presented by the rapid evolution of blockchain. He is a member of the New York State Bar Association’s Task Force on Emerging Digital Finance and Currency.

Jeff counsels on a variety of e-commerce, social media and advertising matters; represents many organizations in large infrastructure-related projects, such as outsourcing, technology acquisitions, cloud computing initiatives and related services agreements; advises on the implementation of biometric technology; and represents clients on a wide range of data aggregation, privacy and data security matters. In addition, Jeff assists clients on a wide range of issues related to intellectual property and publishing matters in the context of both technology-based applications and traditional media.