Nguyen v Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014)
In August 2011, national bookseller Barnes & Noble advertised and held an online “fire sale” of Hewlett-Packard Touchpads. In response, Kevin Khoa Nguyen bought two of the touchpads on the Barnes & Noble website and received an email confirmation of the purchase. The next day, Nguyen received an email from Barnes & Noble stating his order had been cancelled because of unexpectedly high demand. Nguyen alleged that, as a result of this delayed cancellation, he was unable to obtain the HP tablet he wanted and was forced to purchase a more expensive alternative tablet.
The district court denied Barnes & Noble’s motion to compel arbitration, and Barnes & Noble subsequently appealed. The Ninth Circuit ultimately affirmed the district court’s decision.
In its analysis of whether the arbitration agreement was valid, the court first differentiated between two contracts commonly formed on the Internet – clickwrap and browsewrap agreements. Clickwrap agreements were formed when users were required to affirmatively click an “I agree” checkbox after being presented with the website’s terms. Browsewrapagreements, conversely, required no consent checkbox. Instead, for browsewrap agreements the terms needed only be posted via a hyperlink at the bottom of the page and the user would consent to the agreement by using the website. Following this definition, the court classified the Barnes & Noble terms as a browsewrap agreement.