In Cody v. Jill Acquisition LLC, No. 25-937 (S.D. Cal. June 30, 2025), the Southern District of California declined to enforce a retail site’s terms of use and compel arbitration, holding that the plaintiff, who used guest checkout to place an online order at the retail clothing site, did not have adequate notice of the terms and the arbitration clause. This case should serve as a wake-up call for online entities to reexamine electronic contracting processes. It exemplifies how, even if a website’s visual design and its placement of the hyperlinked Terms of Use during user checkout are comparable to other presentations that have been deemed enforceable, a court could still decline to enforce online terms if the context of the transaction is not the typical e-commerce transaction between a registered customer and a retail site. In this case, the court found that by checking out as a guest without creating an account, the user was less likely to expect a continuing relationship and, therefore, the site’s notice and presentation of the terms below the “Place Order” button were not conspicuous enough in this instance to bind the plaintiff.
clickwrap
Assignment of Copyright through Terms of Use: Does E-Sign Make It OK? A Tool for B2B Sites Dealing with Unauthorized Access to Their Content?
By Jeffrey Neuburger on
It is a common practice for Web site providers who accept submissions of user-generated content to include a license provision in their “Terms of Use” to obtain rights to use the content. Rather than relying on the uncertain scope of an implied license, the provider can clarify, and hopefully…
In Clickwrap Data Pass Contract Dispute, Second Circuit Sacks E-mail Notice of Post-Transaction Terms
By Jeffrey Neuburger on
In an important opinion on the enforceability of online contract terms, Senior Circuit Judge Robert D. Sack walks through the last decade and a half of online contracting law on the way to invalidating an arbitration provision in an agreement involving a so-called Web loyalty program. Judge Sack concluded in…
Are Clickwrap Agreements with Minors Enforceable? The Fourth Circuit Won’t Say, But the District Court Said Yes
By Jeffrey Neuburger on
In A.V. v. iParadigms, LLC, 2009 U.S. App. LEXIS 7892 (4th Cir. Apr. 16, 2009), the Fourth Circuit concluded that the archiving of high school student term papers by a plagiarism detection service is protected by the fair use doctrine. Having so ruled, the appeals court did not address the district court’s analysis of the enforceability of the clickwrap agreements executed by the minor students when they submitted their papers to the service. The district court ruling on the issue of enforceability is, therefore, left intact.
The district court opinion offers some other general points of interest with respect to clickwrap agreements.
Clickwrapped and Browsewrapped – Court Rejects Attorney Plaintiff’s Challenge to Travel Site Terms and Conditions
By Jeffrey Neuburger on
Case law has developed over the years with respect to enforceability of Web site terms and conditions, and the general parameters are now pretty well understood. Courts will, in general, enforce online terms and conditions against consumer users, provided they are given adequate notice and an opportunity for review.
There are numerous exceptions to the general rule, however. Courts often refuse to enforce specific terms in Web site terms and conditions against consumers, particularly where those terms involve class action waivers, arbitration requirements, inconvenient forum choices, and like provisions.
The case of Burcham v. Expedia, involving a pro se attorney’s challenge to the enforceability of the Expedia travel site terms and conditions, is not one of those exceptions.