- Published Articles
- In the Press
- Press Releases
Sign Up for Alerts
Sign up to receive receive industry-specific emails from our legal team.
Sign Up for Alerts
We provide tailored, industry-specific legal updates to our clients and other friends of the firm.
Areas of Interest
January 17th, 2013
Court Invalidates Zappos’ Browsewrap Agreement
First, the Zappos TOU was never explicitly agreed to by the consumers. Generally speaking, there are two types of TOU found on the internet, clickwrap and browsewrap. A browsewrap agreement is a link at the bottom of a webpage or application containing a TOU. The user agrees to the browsewrap agreement merely by browsing the site, without having actually read the agreement or accepting the terms of it in any way. In the Zappos case, the court held this type of TOU unenforceable because the user never actually indicates consent. The alternative would have been for each Zappos user to click "I accept" to the TOU when creating an account or when making a purchase. This would have been a better indicator of consent than is available via a browsewrap agreement.
Second, the Zappos TOU contained a very common provision that stated Zappos could modify the TOU at any time. The court took this to an extreme and stated that this power included removing or modifying the arbitration clause. In traditional contract law, a contract that is unilaterally amendable is not an enforceable contract: if one party can change the contract at any time, then what does it really mean and how can a court enforce it? The court did not take into account that this type of provision is nearly ubiquitous on the internet.
One solution for these problems is simple and may have saved Zappos substantial resources defending class action litigations. First, we recommend that clients consider making any TOU on a monetized website or application a clickwrap agreement, not a browsewrap agreement. User consent is most easily obtained during account registration and purchases. Second, consider removing any language in a TOU permitting you to modify the terms of the TOU at any time. Instead, keep track of the user base and have them periodically accept (e.g. for new users, application patches, or purchases) the new TOU whenever you modify it.
As a best practice, a website or application should review its Privacy Policies and TOU at least annually for compliance with updates in the law as well as changing technology.
For more information on the Zappos decision, or any other advertising or marketing law issues, please contact Greg Boyd at (212) 826 5581 or email@example.com, or any other member of the Frankfurt Kurnit Advertising Group.
Share This Page
Other Advertising Law Alerts
Get Ready for California’s New “Automatic Renewal” Rules
California recently amended its Automatic Purchase Renewals law. The amended statute - effective July 1st -- require marketers to provide consumers of automatic renewal or continuous service offers with more information and easier ways to terminate. Read more.
June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018
FTC Issues a $2 Million Reminder to Ad Agencies
The Federal Trade Commission ("FTC") and the State of Maine have announced a $2 million dollar settlement with ad agency Marketing Architects, Inc. ("MAI") for deceptive weight-loss claims. Read more.
February 12 2018