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What You Need to Know About User Agreements

by Allison Peck

What You Need to Know About User Agreements

Lurking in the shadows of our favorite websites are pages of legalese, crafted to stack the odds against the average Internet user.

We’ve already talked about some of the insidious hidden traps in user agreements. Now we’ll overview the more typical terms present in these often-unread user agreements, using Amazon’s Conditions of Use as an example.

Wait a second. When did “I Agree” to anything anyway?

Amazon’s user agreement is known as a “browsewrap” agreement. Browsewrap refers to contract terms that are accessible on a website and apply without a user’s affirmative assent. (“Clickwrap,” on the other hand, requires users to click a button or check a box to indicate their agreement to the terms.). This means that even though you haven’t affirmatively agreed to Amazon’s conditions of use, they apply to you simply by virtue of your use of the website.

Browsewrap contracts have a tenuous legal history—courts tend to look askance at these contracts, showing concern for unwitting Internet users being bound by agreements they’ve never even seen before. In Nguyen v. Barnes & Noble, Inc.1, the Ninth Circuit held that the retail bookseller’s website terms of use were unenforceable. In this case, the website included a conspicuous link to its terms on every web page, but did not otherwise prompt the user to read the terms or provide notice of their existence. The Court drew a distinction between Barnes & Noble’s website and the one at issue in PDC Laboratories, Inc. v. Hach Co.2 Hach’s website, unlike Barnes & Noble’s, explicitly prompted users to “review terms” (though users did not actually have to click the provided link to Hach’s terms) before placing an order. The Ninth Circuit found that Barnes & Noble’s website design was insufficient to place users on constructive notice of the terms of use.

Like Barnes & Noble’s terms, Amazon’s conditions of use are available through a link at the bottom of every web page, close to other important links and information, and users are never required to read the terms or affirmatively agree to them. Amazon also prompts users to “review” their order prior to submitting it, and lets users know that they are agreeing to the conditions of use by placing an order. Whether this design would pass muster in the Ninth Circuit is unclear and, due to the substance of Amazon’s terms, most likely irrelevant anyway, for reasons we’ll explain below.

What are you actually agreeing to?

The provisions of Amazon’s browsewrap agreement fall into several key categories. We’ll take a look at a few of them here.

Dispute resolution

So you’re disgruntled, and you decide you want to bring a lawsuit against Amazon. Where do you start?

Probably in Washington State, where Amazon is headquartered. Amazon’s user agreement provides that, where state law applies, it is Washington’s law that will govern any disputes that arise, regardless of your state of residence or where your claim arose. (Other companies’ user agreements may even mandate the particular forum in which a claim can be brought. For example, Facebook’s Statement of Rights and Responsibilities requires all disputes to be litigated in either the U.S. District Court for the Northern District of California or a state court located in San Mateo County.)

But if you have a claim against Amazon, don’t expect a judge or jury to hear it. You agreed in the browsewrap agreement that your case would be sent to binding arbitration, without any possibility of appealing an unfavorable judgment or arbitration award.

If you have a claim against Amazon, don’t expect a judge or jury to hear it. 

A final common provision in user agreements is one prohibiting class actions. A class action enables everyone with the same grievance to litigate it as a group, which in turn means people can afford an attorney even if their individual claims are for a small amount of money. The class action mechanism, for example, allows iPhone users—as a group—to sue Apple for restitution for that extra 20% of storage space eaten up by iOS 8. By prohibiting class actions, companies discourage individuals from bringing claims in the first place, because each claimant bears the full cost of litigation but is only entitled to a small reward.

Amazon’s user agreement provides that disputes cannot proceed “in a class, consolidated or representative action.” So temp workers at an Amazon warehouse can join as a class to sue their temp agency, but not Amazon, when they believe that they’re owed wages for the extra time they spent going through a security check. (According to the Supreme Court, they aren’t.)

Disclaimers

You’re familiar with warranties—written promises as to the nature or quality of the goods you purchase from manufacturers. But warranties can also be implied, which means that manufacturers must guarantee some aspects of the goods even if they don’t write an express contract to that effect. U.S. law recognizes two implied warranties: the “warranty of merchantability” and the “warranty of fitness for a particular purpose.” Basically, if you buy a forklift, chances are you want it to be able to lift crates (or, you know, people) safely, and the law protects that expectation.

How do companies skirt these protections? Amazon’s user agreement states that all products are provided “as is.” This language enables Amazon to disclaim any implied warranties—and thus any liability for damages that result from defective merchandise—to its users. Amazon also complies with the law by writing its disclaimer in all caps, which we’ve previously explained is the typical solution to a legal requirement that text be “conspicuous.”

Consumers in Massachusetts are in luck, however, as Massachusetts state law makes it illegal to disclaim the warranty of merchantability for household goods, and Amazon’s disclaimer applies only “to the full extent permissible by applicable law.”

Modifications

The above provisions are current as of the time I researched this post. But Amazon reserves the right to change its policies and user agreement at any time. And remember, you agree to these modifications simply by using the website! If this doesn’t seem fair to you, you’re not alone—some courts3 have suggested that unilateral modification of a user agreement without notice may constitute an illusory (and unenforceable) contract. By contrast, Facebook’s terms provide for seven days notice of any amendments via the Facebook Site Governance Page, as well as an opportunity to comment on changes.

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Ultimately, it isn’t always clear whether the provisions of website user agreements are legally binding. Courts and companies continue to struggle to define the legal structure of our increasingly online existence. In the meantime, understanding the conditions that companies have placed in the recesses of their websites helps us to become more knowledgeable, empowered users. By walking you through some of the common conditions you face when you open a browser tab, we hope you can become more confident in the decisions you make online—even if the terms aren’t always in your favor.

  1.  763 F.3d 1171 (9th Cir. 2014).
  2.  No. 09-1110, 2009 WL 2605270 (C.D.Ill. Aug. 25, 2009).
  3.  See Harris v. Blockbuster Inc., 622 F. Supp. 2d 396 (N.D. Tex. 2009); In re Zappos.com, Inc., Customer Data Sec. Breach Litigation, 893 F. Supp. 2d 1058 (D. Nev. 2012).
Allison is a J.D. student at Columbia Law School. She has a strong interest in intellectual property and technology, and hopes to work with tech companies in the Bay Area.