Browsewrap Agreements — Ninth Circuit Requires Mobile App Terms of Service to Be Conspicuously Displayed

March 23, 2020

A “browsewrap” agreement is one in which assent to the terms of use of an Internet service is inferred from the user’s continued use of the service in question.  Browsewrap agreements can be distinguished from “clickwrap” agreements, in which the user is required to click a link or check a box affirming agreement to the terms before using the service.

In 2014, the Ninth Circuit held, in the context of a motion to compel arbitration, that for a browsewrap agreement to be enforceable absent evidence of actual knowledge of the terms by the user, notice of the agreement must be sufficiently conspicuously placed such that a reasonably prudent user would have inquiry notice of the agreement.  Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171, 1177 (9^th Cir. 2014).  In Nguyen, the Ninth Circuit stated that “where a website makes its terms of use available via a conspicuous link on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons [that] users must click on – without more – is insufficient to give rise to constructive notice.”  Nguyen, 763 F.3d at 1178-79. 

The Ninth Circuit has now explicitly extended its browsewrap rule to mobile applications.  In Wilson v. Huuuge, Inc., 944 F.3d 1212 (9^th Cir. 2019), the Ninth Circuit held that a browsewrap-type notification of applicable terms of use was ineffective to bind the user of a mobile application.  Huuuge provides a mobile app called Huuuge Casino which allows smartphone users to gamble with virtual chips (either a limited number of free chips or chips purchased in the app) to play casino games.  Wilson, 944 F.3d at 1214.  In 2018, plaintiff Wilson brought a putative class action against Huuuge alleging that the chip purchase option violated Washington State consumer protection laws.  Huuuge sought to compel arbitration under the app’s terms of use.  Id.

The terms of use were apparently not easy to find.  When downloading the app, the user could download the app directly from the app store, in which case the user was not provided with the terms.  Wilson, 944 F.3d at 1214-18.  Alternatively, the user could download the app from Huuuge Casino’s landing page.  For these types of downloads, the user could, but was not required to (i) click on a small link stating “more” in the app’s description; (ii) scroll through several screens of text; (iii) find a paragraph starting with “read our terms of use;” and (iv) then cut and paste or type a link into a browser to find the terms.  Id.  The Huuuge terms remain available during use of the app, but to find them the user must click on a three-dot menu button in the upper right corner of the app and then choose the terms from a pop-up menu of seven options.  Id.

Not surprisingly, the Ninth Circuit found this to be insufficient to put a reasonably prudent user on notice.  First, the court found that the Huuge terms of use were unambiguously a browsewrap agreement. Id. at 1220. Second, the Ninth Circuit found that the Huuuge terms were not sufficiently conspicuous.  Id. at 1221 (“the Terms are not just submerged – they are buried twenty thousand leagues under the sea”).

The facts of the Huuuge case may be a bit extreme.  Nonetheless, even where terms of service are not submerged twenty thousand leagues under the sea, using a browsewrap model for a mobile app presents a risk that the terms will be held unenforceable.  A clickwrap model, under which the user must agree to the terms before using the app, is preferable.  In addition, app providers should ensure that they keep records of users’ acknowledgement of the terms, so that there will be no issue of actual knowledge.

Author: Sherman W. Kahn