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Pennsylvania District Court Rules Internet Clickwrap Contract Enforceable Whether or Not Read by Users
On March 28, 2007, Judge James T. Giles of the US District Court for the Eastern District of Pennsylvania granted Google’s Motion to Transfer in a civil suit, and ordered the suit to be transferred to the Northern District of California, San Jose Division, the forum of choice in the agreement’s forum selection clause. The subject matter of the suit is an alleged breach of contract by Google with the Plaintiff in its AdWords programme. This ruling reaffirmed that the general contract principle that failure to read an enforceable agreement will not excuse compliance with its terms, absent a demonstration of fraud, applies to Internet clickwrap contracts.
Judge Giles found that the AdWords Agreement gave reasonable notice of its terms. In order to activate an AdWords account, a user would have to visit a webpage that displays the Agreement in a scrollable text box. The text of the Agreement was immediately visible to the user and, in the words of Judge Giles, has a “prominent admonition in boldface” to read the terms and conditions carefully, and with instructions to indicate assent if the user agreed to the terms.
Judge Giles found that the mere fact that a user would have to scroll through the text box of the Agreement to read it in its entirety does not defeat notice; there was sufficient notice of the Agreement itself, and clicking “Yes” constituted assent to all of the terms. In addition, the preamble, which was immediately visible, made clear that assent to the terms was binding; the Agreement was presented in readable 12-point font; the Agreement was only seven paragraphs long; and, a printer-friendly, full-screen version was readily available. In short, a user would have ample time and opportunity to review the Agreement.
Furthermore, a user in the facts of this case would have to take affirmative action and click the “Yes, I agree to the above terms and conditions” button in order to proceed with the transaction. If a user did not agree to all of the terms, he or she would not have been able to activate his or her account, place advertisements, and subsequently incur charges. The requirements of an express contract for reasonable notice of terms and mutual assent were, therefore, satisfied.
After finding the AdWords Agreement to be enforceable, Judge Giles found that the language of the forum selection clause is mandatory, and the clause to be valid and reasonable. Judge Giles found that the Plaintiff had failed to meet his burden as to why he should not be bound by the valid forum selection clause of the Agreement.
Judge Giles granted Google’s motion to transfer and denied the Plaintiff’s motion for summary judgment. The suit was transferred to the Northern District of California, San Jose Division.
For a copy of the US District Court decision, visit:
http://www.paed.uscourts.gov/documents/opinions/07D0411P.pdf
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