Barnes & Noble's Web Terms Of Service Not Enforceable Without Evidence That They Were Seen

from the who-needs-good-customer-service-when-you-have-a-lengthy-TOS? dept

For all the talk about the customer being right, the general attitude of most companies is that the customer is little more than a necessary evil. Between treating them like thieves by insisting on DRM, tying them up with EULAs that kick in as soon as the box is opened (and unreturnable), subjecting them to lengthy Terms of Service that no sane person would read start to finish and stripping away legal options through forced arbitration, most companies still pay lip service to the customer being "right" while carefully removing anything that might be considered a customer's "rights."

Every so often, though, someone slips through the carefully designed system and does the impossible (at least according to the Terms of Service): drag a company to court. Barnes & Noble, despite the presence of an "arbitration only" clause in its TOS, found itself locked out of going its favored route, thanks to a lack of notification on its part. (Hat tip to Nate Hoffelder of The Digital Reader for sending this my way). Eric Johnson at the Blog Law Blog has the details:
The plaintiff in Nguyen v. Barnes & Noble 12-cv-0812-JST (RNBx) (C.D. Cal.; Aug. 28, 2012) sued because after he purchased two HP TouchPad tablet computers at a price he was happy with, Barnes & Noble e-mailed him saying they had cancelled the order.
Now, instead of receiving two TouchPads at $101.95 each, Nguyen was "forced to rely on substitute tablet technology, which he subsequently purchased . . . [at] considerable expense."

Nothing unusual about this so far. Products sell out or pricing errors occur. The correct response would be to offer a replacement at the price Nguyen attempted to pay, but Barnes & Noble decided to simply cancel the order. Lousy customer service isn't uncommon, and B&N was likely surprised to find itself named in a lawsuit, especially when its Terms of Service clearly specify that taking it to court is not an option.

Barnes & Noble filed a motion to move this dispute to arbitration, a much more favorable venue, considering companies win in arbitration nearly 95% of the time. It claimed that Nguyen, simply by visiting the site, had agreed to the terms of use, which were buried in a link at the bottom of the page. Nguyen countered, stating that he did not "affirmatively assent" to the Terms of Use, as it was not necessary to click on the Terms of Use link to make a purchase and B&N never directs the customer to the Terms of Use at any point in the purchase process.

B&N's motion was denied as it couldn't show that Nguyen had "notice of the terms." It's a small oversight but one that could affect many other companies who choose to rely on the dubious legality of "browserwrap," rather than the more intrusive (and more enforceable) "clickwrap." Eric Johnson points out that Barnes & Noble had several options but instead chose to rely on a single, out-of-the-way link.
B&N could have had a pop-up “I agree” window or even just a box that Nguyen had to check saying he agreed to and had read the terms of service. They also could have written on the checkout screen about the transaction was subject to terms of service. But they didn’t do any of that. So, as a result, it looks like Nguyen will get his day in court.
This doesn't really do much for consumers, however. It just means that Barnes & Noble (along with other companies) will institute something like the above to make sure their preferred legal option is not circumvented. This will do nothing to make the system less stacked in favor of the "house," and long, unreadable Terms of Service will still be the order of the day. Considering that not agreeing to the Terms of Service means not using that service, companies can still rely on customers to sell themselves in order to proceed with transactions. As Eric Johnson points out, this effectively makes them "answerable to no one." 

Filed Under: arbitration, terms
Companies: barnes and noble

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  1. icon
    Tigerhawk (profile), 10 Sep 2012 @ 3:02pm

    Another reason they like arbitration ...

    There is zero percent chance that the entire TOS/EULA is thrown out as unconscionable and/or otherwise enforceable. These things are not litigated all that often, there's very little good case law on them, and so lawyers writing these licenses just throw in everything they possibly can, hoping that at least some of it will stick and be enforceable. That's one of the reasons every one of these things has a severability clause.

    That's one thing I miss about brick and mortar. When you buy goods in a normal transaction, you don't have to sign a contract to buy something. You pay money, you get the product, and consumer protection laws govern the transaction, or at least the UCC.

    All bets are off on-line... even if you did have some kind of solid legal argument, the license almost certainly includes a jurisdiction and venue clause requiring you to file wherever the company is located, which is almost certainly not where you are located.

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