Online Contracts Formed By An Affirmative Act of Agreement

    Many web sites contain agreements accessible through a "terms of use" link or a "terms of sale" link. It is, for example, typical for a "legal terms and conditions" hyperlink to be placed close to the "submit" button one clicks on to send credit card payment information. Typically, below the "submit" button, one finds language to this effect: "This sale is governed by the contract accessible through this link. By clicking on this button you agree to these terms and conditions."

    Courts routinely enforce these contracts. Caspi v. Microsoft (732 A.2d 528 (1999)) compares such contracts to the situation encountered in Carnival Cruise Lines, Inc. v. Shute (499 U. S. 585 (1991)). Mr. and Mrs. Shute, a couple living in San Francisco, contracted with Carnival Cruise Lines for a cruise to Puerto Vallarta,. Mexico. The contract–printed on the back of the ticket–specified that all disputes arising out of the contractual arrangement would be litigated in Florida under Florida law. Mrs. Shutte was injured when she slipped and fell on the boat during the cruise. Alleging negligence by Carnival Cruise Lines, Mrs. Shute sued in San Francisco, California. The United States Supreme Court held that Shute’s suit could not be heard in California as the Court held the choice of forum clause was enforceable.

    The Caspi court finds no relevant difference between Caspi’s situation and the one in Carnival Cruise Lines:

"The scenario presented here is different because of the medium used, electronic versus printed; but, in any sense that matters, there is no significant distinction. The plaintiffs in Carnival could have perused all the fine-print provisions of their travel contract if they wished before accepting the terms by purchasing their cruise ticket. The plaintiffs in this case were free to scroll through the various computer screens that presented the terms of their contracts before clicking their agreement." (emphasis added)

    This approach is well-grounded in traditional contract doctrine. The agreement behind the hypertext link is an offer. An offer if it is a manifestation of willingness to enter into a bargain so made as to justify another in understanding that his or her assent will conclude the bargain. Restatement (Second) of Contracts, Section 24.  Clicking on the "submit" button is an acceptance. An acceptance is a manifestation of a willingness to enter the bargain proposed by the offer. One who clicks on the "submit" button will be deemed to have accepted even if he or she did not read the contract as long as there was an adequate opportunity to read and understand the agreement. This is an application of the so-called "duty to read": If one has an adequate opportunity to read and understand an agreement, and enters into the agreement without reading it, the law will, within broad limits, treat one as if one read and understood the agreement.