News & Events

First Circuit Upholds Enforceability of Clickwrap Agreement


By:  Nancy E. Gunnard

In a recent case, Eubanks v. GasBuddy, LLC, the Massachusetts Federal District Court held that the terms of a “clickwrap agreement” are enforceable. Eubanks registered for a GasBuddy card that provided discounts on gas purchases. When using the card, Eubanks incurred overdraft fees. He sued GasBuddy alleging unfair business practices, claiming that he was not given adequate notice that he could incur overdraft fees. GasBuddy responded to Eubanks' complaint by filing a motion to compel arbitration.

A “clickwrap agreement” is an agreement used by websites and apps that requires the user to agree to terms and conditions before using a website, downloading an app, or completing online purchase. By clicking the “I Agree” button, the user agrees to the stated terms and conditions. Massachusetts courts routinely uphold the enforceability of a clickwrap agreement if it “reasonably communicates” the terms of the agreement. “Whether a plaintiff actually scrolled through all of the terms presented to them does not affect whether they were reasonably provided notice of their existence.”

Eubanks claimed that the website did not require him to “check the box” and as such, he did not receive notice of the terms and conditions of use, including agreement to arbitrate any dispute. In upholding the enforceability of the clickwrap agreement, the court explained that an online contract, like any other contract “focuses on whether there is reasonable notice of the terms” and a reasonable agreement by the user to those terms.

Although GasBuddy did not have business records to prove how the registration screens appeared when Eubanks registered, GasBuddy provided images from the Wayback Machine as well as testimony by GasBuddy employees to prove that the clickwrap agreement required users to agree to arbitration.

“Putting aside the reliability of the Wayback machine archive, and whether the Court may even take judicial notice of the website's materials for their truth,” the court found the evidence sufficient to hold that GasBuddy satisfied its burden of proving that Eubanks was given reasonable notice of the mandatory arbitration provision.

Take Aways:

  • A clickwrap agreement is enforceable if it reasonably communicates the terms of the agreement, even if the user is not required to scroll through the terms of the agreement;
  • The burden is on the business to prove that the user was given reasonable notice of the terms; and
  • The business must keep records to prove the content of the clickwrap agreement in effect at the time the user clicked the “I agree” button.