As much as some would like to hide in their heads in the sand, the world of online retailers is growing. Forrester Research Inc. released numbers earlier this year that online shoppers in the United States will spend $327 billion in 2016, up 45% from $226 billion predicted for 2012 and 62% from $202 billion reported in 2011. So you are Grand Rapids startup and you want to push for your piece of that $327 billion pie. That’s great but while you are selling millions of dollars of products through your website, you still have to protect your business.
The honorable Judge Robert Clive Jones ruled in favor of the class and denied Zappos motion for arbitration. In Judge Jones’ discussion of the matter, he discussed the difference between a “browswrap” agreement and a “clickwrap” agreement. A “browswarp” agreement is when the website owner just has the terms and conditions posted somewhere on their website. A “clickwrap” agreement is one in which the user actually is forced to click that they agree with the terms and conditions of the website. Zappos utilized a “browswrap” agreement. Judge Jones stated there was no proof that any consumer ever even viewed the agreement let alone agreed to the terms. Therefore, no enforceable agreement existed.
The lesson we can take away from this is that not only is it important to have a well drafted electronic contract with your customers but also to have it set up that every consumer has to click a link or check a box that states they agree to the terms and conditions you have set. This is proof that your West Michigan small business has placed the agreement in front of the consumer; they have an opportunity to review it; and that they consented to those terms. This will provide your online retail business the most protection from potential issues with customers.
Source: In re Zappos.com Inc., Customer Data Security Breach Litigation, 2012 WL 4466660 (D. Nev. Sept. 27, 2012).