• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Exclusives
    • Nutraceuticals
    • Markets
    • Health
    • Blogs
    • Jobs
    • Events
    • Buyers' Guide
    • Showcases
    • More
  • Magazine
  • News
  • Exclusives
  • Nutraceuticals
  • Markets
  • Health
  • Blogs
  • Jobs
  • Events
  • Buyers' Guide
  • Showcases
  • Current & Past Issues
    Features
    Columns
    Editorials
    Digital Edition
    Subscribe Now
    Advertise Now
    eNewsletter
    Editorial Guidelines
    Top Features
    Healthy Snacking: Matching Lifestyle with Nutrition

    Vitamins & Minerals: Traditions in Preventive Health

    Fiber Revisited: Closing the Gap

    Green Power for Future Generations

    2019 International Buyers' Guide
    Blogs & Guest Articles
    Breaking News
    Certifications, Approvals and Patents
    Exclusives
    Industry & Market News
    People
    Products
    Regulatory
    Research
    Supplier News
    Live From Shows
    Top News
    Study Shows Collagen Peptides Aid Runners in Injury Recovery

    Jim Emme to Receive American Botanical Council Champion Award for 2018

    GOED Releases Updated Omega-3 Ingredient Market Report

    Afrigetics Botanicals Sponsors Bulbine through ABC’s Adopt-an-Herb Program

    Four International Associations Join Food Supplements Europe
    Antioxidants
    Dairy-Based Ingredients
    Enzymes
    Fatty Acids
    Fiber & Carbohydrates
    Green Foods
    Herbs & Botanicals
    Marine Nutraceuticals
    Minerals
    Omega 3s
    Probiotics & Prebiotics
    Proteins, Peptides, Amino Acids
    Sweeteners
    Vitamins

    Study Shows Collagen Peptides Aid Runners in Injury Recovery

    Podcast: Talking Hemp & CBD 101 with AHPA’s Jane Wilson

    Jim Emme to Receive American Botanical Council Champion Award for 2018

    GOED Releases Updated Omega-3 Ingredient Market Report

    Afrigetics Botanicals Sponsors Bulbine through ABC’s Adopt-an-Herb Program
    Consumer Trends
    Contract Manufacturing
    Cosmeceuticals / Nutricosmetics
    Delivery & Dosage Technologies
    Dietary Supplements
    Flavors & Colors
    Functional Foods & Beverages
    Healthcare Trends
    Medical Nutrition
    Mergers & Acquisitions
    Natural/Organic
    Nutrition Bars
    Packaging
    Pet Nutraceuticals
    Quality & Safety
    Regulations
    Research
    Testing
    World Markets

    Study Shows Collagen Peptides Aid Runners in Injury Recovery

    Podcast: Talking Hemp & CBD 101 with AHPA’s Jane Wilson

    Afrigetics Botanicals Sponsors Bulbine through ABC’s Adopt-an-Herb Program

    Four International Associations Join Food Supplements Europe

    Research on Stratum Eggshell Membrane Explores Benefits for Cartilage Protection
    Bone & Joint Health
    Cancer Risk
    Cardiovascular Health
    Cognitive Function
    Diabetes & Blood Sugar Management
    Digestive Health
    Energy
    Eye Health
    Healthy Aging
    Immune Function
    Infant & Children's Health
    Inflammation
    Men's Health
    Mood Health & Sleep
    Oral Health
    Sexual & Reproductive Health
    Skin Health
    Sports Nutrition
    Weight Management/Weight Loss
    Women's Health

    Study Shows Collagen Peptides Aid Runners in Injury Recovery

    Podcast: Talking Hemp & CBD 101 with AHPA’s Jane Wilson

    Afrigetics Botanicals Sponsors Bulbine through ABC’s Adopt-an-Herb Program

    Research on Stratum Eggshell Membrane Explores Benefits for Cartilage Protection

    New Monograph on Centella asiatica Looks to Expand Use and Applications
    Industry Events
    Live From Show Events
    Webinars
    All Companies
    Categories
    Trade Associations
    Company Capabilities
    International Buyers Guide Companies
    BatchMaster Software, Inc.

    Watson Inc.

    Sabinsa Corporation

    Barrington Nutritionals

    PLT Health Solutions
    Companies
    Product Releases
    News Releases
    Literature / Brochures
    White Papers
    Jobs
    VIdeos
    Services
    Add New Company
    International Buyers Guide Companies
    Shanghai Freemen

    BatchMaster Software, Inc.

    Watson Inc.

    Herbally Yours

    Barrington Nutritionals
    • Magazine
      • Current / Back Issue
      • Features
      • Editorial
      • Columns
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Buyers' Guide
      • All Companies
      • Categories
      • Trade Associations
      • Company Capabilities
    • Nutraceuticals
      • Antioxidants
      • Dairy-Based Ingredients
      • Enzymes
      • Fatty Acids
      • Fiber & Carbohydrates
      • Green Foods
      • Herbs & Botanicals
      • Marine Nutraceuticals
      • Minerals
      • Omega 3s
      • Probiotics & Prebiotics
      • Proteins, Peptides, Amino Acids
      • Sweeteners
      • Vitamins
    • Markets
      • Consumer Trends
      • Contract Manufacturing
      • Cosmeceuticals / Nutricosmetics
      • Delivery & Dosage Technologies
      • Dietary Supplements
      • Flavors & Colors
      • Functional Foods & Beverages
      • Healthcare Trends
      • Medical Nutrition
      • Mergers & Acquisitions
      • Natural/Organic
      • Nutrition Bars
      • Packaging
      • Pet Nutraceuticals
      • Quality & Safety
      • Regulations
      • Research
      • Testing
      • World Markets
    • Health
      • Bone & Joint Health
      • Cancer Risk
      • Cardiovascular Health
      • Cognitive Function
      • Diabetes & Blood Sugar Management
      • Digestive Health
      • Energy
      • Eye Health
      • Healthy Aging
      • Immune Function
      • Infant & Children's Health
      • Inflammation
      • Men's Health
      • Mood Health & Sleep
      • Oral Health
      • Sexual & Reproductive Health
      • Skin Health
      • Sports Nutrition
      • Weight Management/Weight Loss
      • Women's Health
    • Online Exclusives
    • Webinars
    • Slideshows
    • Blogs & Guest Articles
    • Health E-Insights
    • Videos
    • Podcasts
    • Infographics
    • Whitepapers
    • Research
      • TrendSense
      • Monograph Center
      • White Papers
      • Research News
    • Jobs
    • Events
      • Industry Events
      • Live From Show Events
      • Webinars
    • Supplier Showcases
      • Companies
      • Product Releases
      • News Releases
      • Literature / Brochures
      • White Papers
      • Jobs
      • VIdeos
      • Services
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Blog

    Website ‘Terms of Use’ May Not Bind Users

    Case law and best practices to help enforce the terms and conditions set forth on your website.

    Terms of use cover everything from copyright information to privacy and data collection.
    Terms of use cover everything from copyright information to privacy and data collection.
    Related CONTENT
    • Chipping Away at Prop 65
    • NutraCea to Sell Cereal Ingredients Business to Kerry
    • Protein Drinks Go Natural
    • AHP Monograph & Therapeutic Compendium for Osha in Progress
    • FDA Warning Letters Target Internet Testimonials
    Matthew Kaplan and Ronie Schmelz, Tucker Ellis LLP03.31.16
    Internet purchasing has experienced explosive growth as online and brick-and-mortar retailers expand their online strategies. In 2014, goods and services worth $1.5 trillion were bought globally by consumers shopping on their desktops, tablets, and smartphones, according to analysis from Criteo. With tremendous opportunity, however, comes potential risk. Most websites try to remove those risks by posting “terms of use” hyperlinks, which companies expect will bind their users. 
     
    These terms of use cover all manner of topics including copyright, trademark and other intellectual property information; privacy and data collection information; returns, warranty and customer service information; payment and shipping information; and provisions limiting the company’s liability, prohibiting class action lawsuits, and requiring use of private dispute resolution services instead of courts. 
     
    American courts often uphold website terms and conditions as valid contracts between the user and company. Some, however, have refused to enforce them, instead concluding no contract actually exists because there was no proof the consumer actually reviewed and agreed to the website’s terms and conditions. This article discusses two recent cases in which courts refused to enforce arbitration provisions found in a website’s terms of use, and provides some best practices to improve the chances that your website’s terms and conditions will bind users.
     
    Contracts formed on the Internet fall primarily into two categories: 1) “clickwrap” or “click-through” agreements where users must click on an “I Agree” box after being presented with a list of terms and conditions of use; and 2) “browsewrap” agreements where the terms and conditions of use are accessible through a hyperlink at the bottom of the page. Unlike clickwrap agreements, a browsewrap agreement does not establish proof that a user actually read (or had the opportunity to read) a website’s terms of use and actually agreed to be bound by those terms in connection with the transaction; instead, agreement is inferred by the mere fact a consumer used the website.
     
    Conspicuous Hyperlinks
    On March 17 a California Court of Appeals ruled as a matter of state law that a business could not require purchasers to arbitrate consumer fraud claims based on arbitration language in browsewrap terms of use accessible through a hyperlink at the bottom of each webpage. Specifically, in Long v. Provide Commerce, Inc. (Appellate Case No. B257910), the court adopted much of the reasoning of a Federal Court of Appeal (the 9th Circuit) and held that the “Terms of Use” hyperlink alone on the www.proflowers.com website did not adequately notify consumers that they would be bound by arbitration merely by using the website.
     
    At issue in Long was whether www.proflowers.com could force a consumer to arbitrate his consumer fraud claims based on a browsewrap agreement. The court held that the hyperlink alone was not enough to constitute an enforceable agreement: “In our view, the problem with merely displaying a hyperlink in a prominent or conspicuous place is that, without notifying consumers that the linked page contains binding contractual terms, the phrase ‘terms of use’ may have no meaning or a different meaning to a large segment of the Internet-using public. In other words, a conspicuous ‘terms of use’ hyperlink may not be enough to alert a reasonably prudent Internet consumer to click the hyperlink.”  (Emphasis added.) 
     
    The Long court concluded that to enforce a browsewrap agreement, websites must prominently notify users that continued use of the website will constitute an agreement to be bound by the site’s terms of use: “Online retailers would be well-advised to include a conspicuous textual notice with their terms of use hyperlinks going forward.”
     
    Binding Agreements?
    More recently, a federal trial court in North Carolina highlighted the challenges of even trying to enforce click-through agreements, including those seeking to compel arbitration. The court in Dillon v. BMO Harris Bank, et al. (Case No. 1:13-cv-897), noted that: “Clickwrap agreements … pose special risks of fraud and error. When one of the contracting parties has exclusive control of the electronic record, which is the case in many consumer online transactions, that party is in a position to produce a document that meets its current preferences and needs. Even absent fraud, there is risk of error in the production of a document from the bowels of an electronic record-keeping system, which may include agreements whose terms and electronic click-through procedures vary over time. The risk is even higher when the party maintaining the records and the party producing the records are not the same.” 
     
    The defendant bank in Dillon tried to compel arbitration based on a provision contained in an online loan contract. The borrower claimed there was no proof that the click-through contracts contained an arbitration agreement and denied he agreed to arbitrate his claim.
     
    The bank submitted to the court statements under oath by customer service employees of a third party loan servicing business that worked for the lender to prove the plaintiff agreed to arbitrate disputes. Each statement described the online loan application process through which the borrower provided personal and financial information, checked boxes, clicked buttons, and confirmed that the loan application and associated agreements required arbitration.
     
    But the Dillon court found this evidence insufficient because the witnesses could not confirm that the loan documents submitted to the court were the same documents presented and agreed to by the plaintiff, could not explain how the online documents were created, preserved, presented to loan applicants, and could not describe the banks’ online lending procedures and document preservation practices.  The court concluded that click-wrap agreements pose special risks of fraud and error, particularly when there was no evidence that the documents were properly stored and retrieved in their original form without alteration. The fact that the Bank produced agreements with arbitration provisions which were created at some unknown time and for some unknown purpose did nothing to prove that this particular plaintiff agreed to arbitrate.

    The Long decision puts companies doing online business with consumers on notice that simply including a hyperlink to a website’s terms of use does not create a binding agreement with users. Dillon shows that companies using clickwrap or click-through agreements must keep adequate, admissible, and trustworthy evidence that a consumer has agreed to the actual agreement the website wants to enforce.
     
    Best Practices
    The following are suggested best practices which, if adopted, should help you enforce the terms and conditions set forth on your website.
     
    1) Be sure your website includes hyperlinks to complete and comprehensive terms and conditions setting forth all of the conditions you seek to impose on website users.
     
    2) Require consumers who use your website to acknowledge, through use of a clickwrap or click-through box, that they have reviewed and agree to be bound by the terms and conditions. The acknowledgement can either come in the form of a clickwrap agreement that pops-up immediately upon the opening of the website (best) or it can appear before the check-out or purchase of goods or services from the website.
     
    3) Keep documents showing the date different consumer agreements and terms of use were created, went online, and were in use, including copies of each agreement.  This same information should be kept for every change to these agreements. While your third party vendors providing electronic payment, collection, accounting and other web services may keep this information themselves, you should not rely on others to do it properly or have readily available when you need to prove a user’s agreement. 
     
    4) Given the ever growing privacy concerns and the proliferation of comprehensive privacy laws around the world, it is advisable to adopt the same practice for posting, keeping, documenting, and seeking agreement to your website’s privacy policy.


    Matthew I. Kaplan is a partner and co-chair of the Food, Cosmetics and Nutritional Supplements Group located in the Los Angeles office of Tucker Ellis LLP. He can be reached at matthew.kaplan@tuckerellis.com.
     
    Ronie M. Schmelz, counsel in the Los Angeles office of Tucker Ellis and co-chair of the firm’s Food, Cosmetics and Nutritional Supplements Group, is a seasoned litigator who counsels clients on litigation-avoidance strategies and ensuring compliance with state and federal laws, including regulations enforced by the Food and Drug Administration (FDA), Federal Trade Commission (FTC), and other regulatory agencies. She can be reached at ronie.schmelz@tuckerellis.com.
     

    Matthew I. Kaplan

    Ronie M. Schmelz
     
    Related Searches
    • ftc
    • Regulations
    • Nutritional
    • Regulatory
    Related Knowledge Center
    • Regulations
    Suggested For You
    Understanding FTC Standards for Claims Substantiation Understanding FTC Standards for Claims Substantiation
    NPA Organizes 20th Annual Natural Products Day NPA Organizes 20th Annual Natural Products Day
    Establishing Specifications as Required by Dietary Supplement cGMPs Establishing Specifications as Required by Dietary Supplement cGMPs
    CRN Building Relationships with Congressional Newcomers CRN Building Relationships with Congressional Newcomers
    Prevagen Marketers Charged With Making False Claims Prevagen Marketers Charged With Making False Claims
    FDA’s New Rule on Sanitary Transport of Food FDA’s New Rule on Sanitary Transport of Food
    NetSuite vs. Sage: Which Software is the Best for Your Company NetSuite vs. Sage: Which Software is the Best for Your Company
    FDA Warning Letters Target Internet Testimonials FDA Warning Letters Target Internet Testimonials
    AHP Monograph & Therapeutic Compendium for Osha in Progress AHP Monograph & Therapeutic Compendium for Osha in Progress
    Protein Drinks Go Natural Protein Drinks Go Natural
    NutraCea to Sell Cereal Ingredients Business to Kerry NutraCea to Sell Cereal Ingredients Business to Kerry
    Chipping Away at Prop 65 Chipping Away at Prop 65

    Related Blog

    • Consumer Trends | Regulations
      The Importance of Nutrient Density in Helping Consumers Make Healthier Food Choices

      The Importance of Nutrient Density in Helping Consumers Make Healthier Food Choices

      Understanding nutritional information on food labels can empower people to make smarter eating decisions.
      By Simon Sum, DCN, RDN, ACSM-CPT, FAND, Manager of Product Science, R&D at Herbalife Nutrition 07.09.18

    • Dietary Supplements | Regulations
      24 Years After DSHEA, Industry Still Lacks ODI Clarity

      24 Years After DSHEA, Industry Still Lacks ODI Clarity

      An FDA-sanctioned database would alleviate uncertainty about the regulatory status of many dietary ingredients.
      By Duffy MacKay, ND, Senior Vice President, Scientific & Regulatory Affairs, Council for Responsible Nutrition 04.02.18

    • Regulations
      Trademarks and Social Media: What Nutraceutical Marketers Need to Know

      Trademarks and Social Media: What Nutraceutical Marketers Need to Know

      Social media sites put a lot of stock into federal trademark registration, and so should you.
      By Josh Gerben, Founder, Gerben Law Firm, PLLC 05.04.17


    • Consumer Trends | Delivery & Dosage Technologies | Dietary Supplements | Healthcare Trends | Medical Nutrition | Regulations
      Consumer Health in the Age of Connectivity

      Consumer Health in the Age of Connectivity

      Euromonitor explores how mobile consumers and fast-moving startups are revolutionizing healthcare.
      Carolina Ordonez, Industry Analyst - Consumer Health, Euromonitor International 02.23.17

    • Dietary Supplements | Quality & Safety | Regulations
      FDA’s NDI Draft Guidance: What Insiders Need to Know

      FDA’s NDI Draft Guidance: What Insiders Need to Know

      The draft guidance is an intimidating document full of variables and shades of gray.
      Kelly Waters, Marketing Manager, InstantGMP, Inc. 11.21.16

    • Antioxidants | Natural/Organic | Quality & Safety | Regulations | World Markets
      Brexit Implications for Organic Trade

      Brexit Implications for Organic Trade

      The first impact of Brexit will be an increased workload for regulators, policy lawyers and specialists.
      Hope Lee, Senior Analyst, Beverages, Euromonitor International 07.05.16


    • Delivery & Dosage Technologies | Dietary Supplements | Regulations
      Intellectual Property Law: What Nutraceutical Companies Should Know

      Intellectual Property Law: What Nutraceutical Companies Should Know

      Patent protection in a competitive market can give your business an advantage.
      Rose M. Thiessen, PhD, Partner, Knobbe Martens & Samantha C. Markley, Associate, Knobbe Martens 06.13.16

    • Dietary Supplements | Quality & Safety | Regulations | Vitamins | World Markets
      Strengthening the Nutraceutical Supply Chain

      Strengthening the Nutraceutical Supply Chain

      Companies must consider packaging, transportation and fulfillment costs for their operations.
      Brian Broadhurst, Vice President of Transportation Solutions, Spend Management Experts 05.23.16

    • Diabetes & Blood Sugar Management | Functional Foods & Beverages | Minerals | Natural/Organic | Regulations | Vitamins | World Markets
      Sugar Tax On Soft Drinks: What If It Applied To 100% Juice?

      Sugar Tax On Soft Drinks: What If It Applied To 100% Juice?

      While sales have been dropping, people are still consuming large amounts of sugar from 100% fruit juices.
      Sara Petersson, Nutrition Analyst, Euromonitor International 05.03.16


    • Antioxidants | Cardiovascular Health | Confectionery | Consumer Trends | Healthcare Trends | Minerals | Regulations | Vitamins | World Markets
      The New Eatwell Guide: In Tune With U.K. Eating Habits?

      The New Eatwell Guide: In Tune With U.K. Eating Habits?

      Public perception sometimes runs counter to nutrition science.
      Simone Baroke, Contributing Analyst, Euromonitor International 04.20.16

    • Dietary Supplements | Healthcare Trends | Regulations
      FDA ‘Chills’ Cannabidiol Marketplace

      FDA ‘Chills’ Cannabidiol Marketplace

      Agency sent a series of warning letters to companies marketing dietary supplements containing CBD oil on Feb. 9.
      Robert T. Hoban, Esq., Managing Partner, Hoban & Feola, LLC 02.22.16

    • Dietary Supplements | Regulations
      FDA Warning Letters Target Internet Testimonials

      FDA Warning Letters Target Internet Testimonials

      Companies must monitor and evaluate customer testimonials while understanding federal guidelines.
      Matthew Kaplan & Ronie Schmelz, Tucker Ellis LLP 02.04.16

    • Natural/Organic | Quality & Safety | Regulations | World Markets
      Trouble Ahead for Sustainable Palm Oil?

      Trouble Ahead for Sustainable Palm Oil?

      Companies could face difficult decisions regarding their palm oil purchasing policy.
      Alan Rownan, Ethical Labels Analyst, Euromonitor International 12.17.15

    • Dietary Supplements | Digestive Health | Regulations | Research
      Lessons For Industry From Bayer’s Victory

      Lessons For Industry From Bayer’s Victory

      The Court’s decision in U.S. v. Bayer is welcome news to industry.
      Jonathan F. Cohn, Partner, and Benjamin M. Mundel, Associate, of Sidley Austin LLP 11.10.15

    • Healthcare Trends | Natural/Organic | Quality & Safety | Regulations | Research
      Genetic Engineering & GMOs: What You Rarely Hear

      Genetic Engineering & GMOs: What You Rarely Hear

      An overwhelming majority of scientists from credible organizations support the safety of these crops and food.
      Lisa Katic, RD 10.30.15

    Breaking News
    • PepsiCo to Acquire CytoSport from Hormel Foods
    • Study Shows Collagen Peptides Aid Runners in Injury Recovery
    • Glanbia Nutritionals to Acquire Watson
    • Alkemist Labs Cuts Testing Turnaround Time by 20%
    • Jim Emme to Receive American Botanical Council Champion Award for 2018
    View Breaking News >
    CURRENT ISSUE

    Jan/Feb 2019

    • Healthy Snacking: Matching Lifestyle with Nutrition
    • Vitamins & Minerals: Traditions in Preventive Health
    • Fiber Revisited: Closing the Gap
    • Green Power for Future Generations
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • privacy policy
    • term and condition
    • about us
    • contact us

    follow us

    Subscribe

    magazines

    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image
    Image

    Copyright © 2019 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login