Federal Court Holds Combination of Clickwrap Agreement and 30-Day Right to Cancel Letter Made Arbitration Clause Clear to User Reply

E-Commerce News provided by BuckleySandler LLP for informational purposes only, and should not be construed as legal advice on any subject matter.

March 6, 2012

Recently, the U.S. District Court for the District of Colorado held that a clickwrap agreement combined with a follow up thirty-day right to cancel letter presented users with an arbitration clause in a reasonably conspicuous manner. Grosvenor v. Qwest Corp. , No. 09-02848, 2012 WL 602655 (D. Colo. Feb. 23, 2012). The plaintiff brought suit against his internet service provider (ISP), Qwest Corporation, claiming that Qwest violated a lifetime price guarantee for the service. Qwest moved to compel arbitration. The court held that although the terms were not presented in the clearest manner, they were sufficiently conspicuous and provided an opportunity for a reasonable user to review them. The installation software provided to the plaintiff specifically mentioned the existence of an arbitration clause, directed the plaintiff to the ISP’s website to review the agreement, and required that the plaintiff accept the terms before installing the software. The court raised concerns that once directed to the ISP website to review the arbitration terms, the plaintiff was required to click through two pages to find the terms. Despite this, the court stated that, as a matter of law, the multiple clicks requirement does not prevent contractual formation. Moreover, a follow up “Welcome Letter” sent to the plaintiff by the ISP again identified the arbitration clause and provided plaintiff with an opportunity to cancel the service within thirty days. The court decline to determine whether either the clickwrap agreement or the letter would be sufficient on their own, but together they rendered the contractual terms sufficiently clear for a reasonable user. In the end, the court found the arbitration agreement unenforceable on other grounds.

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