The time-honored method for parties to signify their agreement to a contract – a signature on a piece of paper – has had to adapt to the digital age, and the law has adapted with it. Electronic signatures were declared valid in New Hampshire in 2001 with the enactment of the Uniform Electronic Transactions Act, RSA 294-E. In the fast paced world of e-commerce, however, parties often enter into contracts online with a single click of a mouse or tap on a smartphone screen. This development has led courts to scrutinize the process in an effort to ensure that such actions truly manifest a party’s intent to be bound to contractual terms where the “fine print” is on a different webpage.
New Hampshire’s first foray into this quagmire seems to be Ford v. Netgear, Inc., Hillsborough-North No. 216-2019-CV-00704 (March 9, 2020). The issue was whether an online purchaser of a WiFi system had agreed to arbitrate any disputes with the seller. The Court concluded that he had, by clicking a box on the registration page directly below text which recited that doing so signified agreement to the seller’s terms and conditions (which happened to include an arbitration clause). The terms and conditions were found on a separate page that the plaintiff insisted he never visited, although a prominent hyperlink to those terms would have taken him there had he bothered to click on it. That was enough for the Court. Could the seller’s website have declined registrations until the hyperlink was clicked? Sure. Was the seller required to set up its website that way in order to prove the purchaser’s assent? No.
Some appellate decisions from other states have taken a less accommodating view. In Kauders v. Uber Technologies, Inc., 486 Mass. 557 (2021), the Court declined to enforce an arbitration clause in Uber’s online terms and conditions. Its website alerted consumers that “By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy,” which were viewable by clicking a hyperlink. Finding the Uber registration “qualitatively different from a large business deal where sophisticated parties hire legal counsel to review the fine print,” id. at 575, the Court noted that “the interface did not require the user to scroll through the conditions or even select them. The user could fully register for the service and click ‘done’ without ever clicking the link to the terms and conditions.” Id. at 576. Moreover, “‘DONE’ is also different from, and less clear than, other affirmative language such as ‘I agree.’” Id. at 580.
Similarly, in Wollen v. Gulf Stream Restoration and Cleaning, LLC, 2021 N.J. Super. LEXIS 94 (July 9, 2021), a New Jersey appellate court declined to enforce a contractor referral service’s arbitration provision in its terms and conditions reachable by a hyperlink from its search page. According to the Court, the positioning of the hyperlink on the webpage “did not provide reasonable notice of HomeAdvisor’s terms and conditions to the reasonably prudent internet user.” As was true of Kauders, “HomeAdvisor did not require plaintiff to open, scroll through, or acknowledge the terms and conditions by ‘clicking to accept’ or checking a box that she viewed them before clicking the View Matching Pros submit button.”
If you are “old school” and think that paperless contracting doesn’t apply to the construction industry, think again. In recent years I have noticed more and more general contractors and supply houses whose subcontracts and credit applications are not only electronically signed, but incorporate by reference terms and general conditions that are accessible only on their websites. Those websites should be designed so as to minimize claims of surprise and lack of assent. While courts may well be more solicitous of online consumers’ potential confusion as compared to commercial users, it is safe to say that any online user is more likely to be bound to terms and conditions found on a different webpage than the one he clicks if those terms are accessible by a hyperlink which is (a) conspicuous, and (b) positioned on the webpage where viewers are likely to see it before they click to signify assent.
New Hampshire’s first foray into this quagmire seems to be Ford v. Netgear, Inc., Hillsborough-North No. 216-2019-CV-00704 (March 9, 2020). The issue was whether an online purchaser of a WiFi system had agreed to arbitrate any disputes with the seller. The Court concluded that he had, by clicking a box on the registration page directly below text which recited that doing so signified agreement to the seller’s terms and conditions (which happened to include an arbitration clause). The terms and conditions were found on a separate page that the plaintiff insisted he never visited, although a prominent hyperlink to those terms would have taken him there had he bothered to click on it. That was enough for the Court. Could the seller’s website have declined registrations until the hyperlink was clicked? Sure. Was the seller required to set up its website that way in order to prove the purchaser’s assent? No.
Some appellate decisions from other states have taken a less accommodating view. In Kauders v. Uber Technologies, Inc., 486 Mass. 557 (2021), the Court declined to enforce an arbitration clause in Uber’s online terms and conditions. Its website alerted consumers that “By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy,” which were viewable by clicking a hyperlink. Finding the Uber registration “qualitatively different from a large business deal where sophisticated parties hire legal counsel to review the fine print,” id. at 575, the Court noted that “the interface did not require the user to scroll through the conditions or even select them. The user could fully register for the service and click ‘done’ without ever clicking the link to the terms and conditions.” Id. at 576. Moreover, “‘DONE’ is also different from, and less clear than, other affirmative language such as ‘I agree.’” Id. at 580.
Similarly, in Wollen v. Gulf Stream Restoration and Cleaning, LLC, 2021 N.J. Super. LEXIS 94 (July 9, 2021), a New Jersey appellate court declined to enforce a contractor referral service’s arbitration provision in its terms and conditions reachable by a hyperlink from its search page. According to the Court, the positioning of the hyperlink on the webpage “did not provide reasonable notice of HomeAdvisor’s terms and conditions to the reasonably prudent internet user.” As was true of Kauders, “HomeAdvisor did not require plaintiff to open, scroll through, or acknowledge the terms and conditions by ‘clicking to accept’ or checking a box that she viewed them before clicking the View Matching Pros submit button.”
If you are “old school” and think that paperless contracting doesn’t apply to the construction industry, think again. In recent years I have noticed more and more general contractors and supply houses whose subcontracts and credit applications are not only electronically signed, but incorporate by reference terms and general conditions that are accessible only on their websites. Those websites should be designed so as to minimize claims of surprise and lack of assent. While courts may well be more solicitous of online consumers’ potential confusion as compared to commercial users, it is safe to say that any online user is more likely to be bound to terms and conditions found on a different webpage than the one he clicks if those terms are accessible by a hyperlink which is (a) conspicuous, and (b) positioned on the webpage where viewers are likely to see it before they click to signify assent.
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