The Pitfalls of Using Browsewrap Agreements for E-Transactions

Introduction
As the commercial world continues moving business processes and transactions to mobile devices and the web, the legal world continues working—and often struggling— to adapt traditional contract principles to an ever-evolving electronic paradigm. The recent ruling of the United States District Court for the Northern District of California, in Rushing v. Viacom, where the court grappled with the enforceability of an arbitration clause of a website user agreement, should serve as a warning for companies considering entering into online agreements with their customers. The Rushing v. Viacom decision illustrates that a party seeking to create an enforceable electronic contract with its customers must provide clear and explicit, notice of the contract’s terms and conditions, and a mechanism for confirming its customers’ acceptance of such terms and conditions, or face the risk that a court will not enforce the electronic contract.