Browsing a Website May Be Sufficient to Create an Agreement To Arbitrate

Contracts are increasingly signed electronically, with an online click for every kind of transaction imaginable—from simple, everyday retail purchases to complex matters of great consequence.

More than two dozen people purchased Walmart gift cards only to discover they were worthless because of alleged third party tampering with the cards.

A notation on the back of the gift cards directed purchasers to “[s]ee Walmart.com for complete terms.” The website contained an arbitration provision covering “ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND WALMART.” Customers “accept[ed]” arbitration, according to the website, by “[u]sing or accessing the Walmart Sites.”

Walmart argued that similar to a “clickwrap” agreement which requires the user to explicitly asset by clicking “I agree,” a “browser wrap” agreement imputes assent through using or accessing Walmart’s website.

The trial court denied arbitration finding there was no proof that the plaintiffs saw the terms of use, were otherwise aware that the terms existed before filing the lawsuit, or saw the notice on the gift cards that the terms applied.

Remanding for trial, the Eighth Circuit noted there were two fact issues. First whether any of the Plaintiffs used or accessed Walmart’s website. Second whether the structure and design of the website put a reasonably prudent user on notice of the terms. Citing authority, the Eighth Circuit observed if the terms of use on a website are sufficiently conspicuous, then a user is deemed to have notice of all facts that a reasonable inquiry would disclose. Foster v Walmart, Inc., No. 20-178 (February 18, 2022).