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Case: Berkson v. Gogo LLC (2015)

In the case of Berkson v. Gogo LLC, 97 F. Supp. 3d 359 (E.D.N.Y. 2015), Senior Judge Jack Weinstein of the Eastern District of New York surveyed the recent history of court cases addressing the enforceability of EULAs, providing useful categories and definitions for analysis and a framework for assessing whether terms of use or EULAs should be found binding. This summary discusses the case, presents Judge Weinstein’s categories and definitions, and summarizes his observations regarding other cases. Finally, it addresses gaps in empirical knowledge the court identified here and which should probably be the focus of further study, or, in the event empirical research on these topics exists, we should bring it to the attention of courts and practitioners.


This Case

Adam Berkson and Kerry Walsh sued Gogo LLC and its affiliates on their own behalf and on behalf of the class of similarly situated persons. 97 F. Supp. 3d at 365. They alleged that Gogo, a provider of internet access on airline flights, had misled them into signing up for a service with a monthly recurring charge when the plaintiffs believed they were making a one-time purchase for service for a single month. Id. The plaintiffs alleged “common law breach of the implied covenant of good faith and fair dealing, common law unjust enrichment, and violation of various consumer protection statutes.” Id. The court’s opinion supported its denial of Gogo’s motion to transfer venue or to compel arbitration and its refusal to enforce the provisions in Gogo’s terms of service that required the parties to litigate in Illinois, or in Berkson’s case required arbitration. Id. at 376. (Not treated in this summary is Gogo’s motion to dismiss for lack of standing, which the court also denied.)

The court did not need to interpret the venue and arbitration clauses at this stage, however, as it concluded there was insufficient basis to find a contract was formed in the first place. The case of Welsh turned on a matter of proof: There was a checkbox next to the phrase “I agree to the terms of use” (where “terms of use” was an underlined hyperlink) on the account-creation page, but unlike certain other fields that were marked with asterisks as required fields, no asterisk appeared next to the check box. In other words, the court concluded that there was a dispute as to whether Welsh had affirmatively assented to the terms by checking this box.

Judge Weinstein recalled the reasonable communicativeness test, which arose in the mid-20th century in response to the proliferation of form contracts or “contracts of adhesion” between producers/sellers and consumers. Id. at 382. According to that test, “(1) The burden is on the [producer/seller] to impress upon the [consumer] the importance of the binding contract being entered into by the latter; and (2) The duty is on the [producer/seller] to explain the relevance of the critical terms governing the [consumer’s] substantive rights contained in the contract. ” Id.

Judge Weinstein then adopted the following evaluative framework (quoted from the judge’s opinion):

  1. Aside from clicking the equivalent of sign-in (e.g., log-in, buy-now, purchase, etc.), is there substantial evidence from the website that the user was aware that she was binding herself to more than an offer of services or goods in exchange for money? If not, the “terms of use,” such as those dealing with venue and arbitration, should not be enforced against the purchaser.
  2. Did the design and content of the website, including the homepage, make the “terms of use” (i.e., the contract details) readily and obviously available to the user? If not, the “terms of use,” such as those dealing with venue and arbitration, should not be enforced against the purchaser.
  3. Was the importance of the details of the contract obscured or minimized by the physical manifestation of assent expected of a consumer seeking to purchase or subscribe to a service or product? If yes, then the “terms of use,” such as those dealing with venue and arbitration, should not be enforced against the purchaser.
  4. Did the merchant clearly draw the consumer’s attention to material terms that would alter what a reasonable consumer would understand to be her default rights when initiating an online consumer transaction from the consumer’s state of residence: The right to (a) not have a payment source charged without notice (i.e., automatic payment renewal); (b) bring a civil consumer protection action under the law of her state of residence and in the courts in her state of residence; and (c) participate in a class or collective action? If not, then (a), (b), or (c) should not be enforced against the consumer.

Id. at 402.

The court examined both the sign-up and sign-in pages that confronted Berkson on Gogo. At the time of account creation, the court concluded that the consumer did not manifest assent to contract formation by clicking the “Next” button adjacent to the legend “By clicking ’NEXT’ I agree to the terms of use and privacy policy” (where “terms of use” and “privacy policy” were underlined as hyperlinks). (See illustration from the court’s opinion.)




Similarly, the court found no consumer assent resulting from clicking a “Sign-in” button next to the clause “By clicking ‘Sign In’ I agree to the terms of use and privacy policy” (where “terms of use” and “privacy policy” were underlined as hyperlinks). (See illustration from the court’s opinion.)




First, the court placed the burden of producing evidence that the consumer “knew that he was binding himself” on the producer before enforcing the contract. Id. at 404. Second, it applied its framework above and concluded that that the “design and content of the website, including the homepage, did not make the ‘terms of use’ readily and obviously available to Berkson.” Id. at 404. The court noted particularly that (a) the “hyperlink to the ‘terms of use’ was not in large font, all caps, or in bold,” (b) the terms of use was not “accessible from multiple locations on the webpage” (c) when the consumer “clicked ‘SIGN IN,’ the ‘terms of use’ did not appear in a new screen or in a pop-up window on the same screen,” and (d) the consumer was not required to scroll through the agreement before accepting it. Id. at 404. The “sign in” button, by contrast was very prominently displayed. Id. The court also noted that Gogo “did not have a practice of emailing or mailing the contents of the ‘terms of use’ to its customers.” Id. at 403.

The court distinguished Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) where the U.S. Supreme Court enforced a forum-selection clause printed on a cruise ticket. It noted that the cruise ticket’s legend was printed in capital letters, made two references to the word “contract,” included the words “important” and “please read,” and provided information about where to find the contract terms. Id. at 403.

Gogo appealed to Second Circuit in April 2015, but by spring 2016, the parties had agreed to postpone the court’s consideration, and in May 2016 the appellant withdrew its appeal. See docket for Berkson v. Gogo LLC, 15-1407 (2d Cir. April 28, 2015).


Categories and definitions

Judge Weinstein provided (or reaffirmed) the following helpful definitions and classifications.


Browse-Wrap Contracts

Browsewraps can take various forms but basically the website will contain a notice that—by merely using the services of, obtaining information from, or initiating applications within the website—the user is agreeing to and is bound by the site’s terms of service. Because of the passive nature of acceptance in browsewrap agreements, courts closely examine the factual circumstances surrounding a consumer’s use…. For an internet browsewrap contract to be binding, consumers must have reasonable notice of a company’s “terms of use” and exhibit “unambiguous assent” to those terms.

Id. at 395 (quotations and citations omitted).


Click-Wrap Contracts

Clickwrap agreements require a user to affirmatively click a box on the website acknowledging awareness of and agreement to the terms of service before he or she is allowed to proceed with further utilization of the website.” By requiring a physical manifestation of assent, a user is said to be put on inquiry notice of the terms assented to.

Id. at 397 (quotations and citations omitted).


Scroll-Wrap Contracts

A site or product where “the user must scroll through the ‘terms of use’ and click ‘accept’ in order to complete an internet transaction is one such good practice.” Id. at 386. Consequently, scrollwrap contracts are a subset of clickwrap contracts.


-Wrap Contracts

These internet consumer contracts do not require the user to click on a box showing acceptance of the “terms of use” in order to continue. Rather, the website is designed so that a user is notified of the existence and applicability of the site’s “terms of use” when proceeding through the website’s sign-in or login process.

Id. at 399.


Generalizations From The Caselaw

Weinstein generalized about courts’ treatments of the various categories of wrap contract. He noted that “[b]ecause of the passive nature of acceptance in browsewrap agreements, courts closely examine the factual circumstances surrounding a consumer’s use.” Id. at 395. In contrast, though federal circuit courts have not held that clickwrap agreements are presumptively enforceable, “almost every lower court to consider the issue has found ‘clickwrap’ licenses, in which an online user clicks ‘I agree’ to standard form terms, enforceable.” Id. at 397 (quotations and citations omitted).

Weinstein argued (as others have) for a distinction between scrollwrap and clickwrap contracts more generally. He did not generalize about the enforceability of scrollwrap agreements. All the cases he cited found the terms enforceable. Finally, he considered sign-in-wrap, noting that courts have found them enforceable under circumstances that “emphasized notice and an effective opportunity to access terms and conditions.” Id. at 400.


Gaps In Empirical Research

In considering how the average internet user would respond to presentation of EULAs in this case and others, the judge decided to examine academic research studies, which he said “proved inadequate.” Id. at 377. The gaps he noted in the research included:

  • “what the average internet user perceives to be the meaning of the phrase ‘terms of use’ or ‘terms and conditions’” Id. at 380.
  • “the degree to which [the average user] is aware that each time a purchase is conducted over the internet, a binding contract regarding more than just the promise to pay may be being entered into.” Id.
  • “what the average internet user, one who does not necessarily conduct much of her business online, perceives to be the purpose of a website’s ‘terms of use.’” Id. That is, does she recognize it as a contract?
  • “[r]eliable scientifically-based studies assessing the types of visual and written cues that put a representative sample of American society, i.e., the average internet user, on actual notice of the importance and ramifications of “terms of use”’ Id.

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