Clickwrap held enforceable.
Feldman v. Google, Inc. (2007)
Google’s ‘AdWords’ program offers ‘pay per click’ advertising, which allows businesses and individuals to increase website traffic. If an internet user searches using keywords bought by an advertiser, the ad appears at the top of the webpage. Every time the ad is clicked, sending a visitor to the advertiser’s website, the advertiser is charged by Google.
Lawrence E. Feldman, an attorney, bought advertising from Google in an attempt to attract potential clients to his law firm. Later on he claimed, that he was a victim of ‘click fraud’, which is when competitors or pranksters click repeatedly on the ad, driving up the advertising cost. Feldman claimed that the practice had resulted in advertising costs exceeding $100,000 over a three-year period and it had discouraged him from advertising. Feldman held the view that 20 to 30% of the clicks were fraudulent and that Google had the capability to track and prevent such fraud. He filed a suit against Google in the Federal Court of Pennsylvania.
The subject that was at issue in this case was the forum selection clause of the clickwrap agreement. According to the clause any disputes were to be resolved in Santa Clara County, California, and thus to be governed by the California law.
Feldman also argued that because the agreement did not include definite price terms, it was unenforceable. He also argued that the AdWords Agreement was procedurally unconscionable, because it was offered on a ‘take it or leave it’ basis, without an opportunity to bargain.
Feldman claimed that the contract was never signed or negotiated by Feldman & Associates or anyone at his firm personally, so the online agreement, which he must have clicked through in the process of placing the ad, was not binding.
The court rejected all the arguments. It found that the Plaintiff had to enter into an AdWord clickwrap agreement before activating his account and placing the ad. The online sign-up process consisted of several steps including a request for the user’s assent to the terms and conditions. At the top of the Agreement it was clearly stated that by consent to the terms listed below a binding agreement with Google would be formed.
The court concluded that Feldman had reasonable notice of the terms and indicated his assent. The terms were presented in a pop-up window, the text was clearly visible, and the window had a scroll bar, which allowed the user to scroll down and read the entire contract. The plaintiff checked the ‘I agree’ box, manifesting his assent to the terms.
The court also found that the Agreement did not include a fixed price for the services, but it contained the exact formula for computing the price, so the contract was found binding.
The court also rejected the claim on procedural unconscionability, stating that the plaintiff was qualified to understand the Agreement terms, was not pressured to accept the terms in any way, obviously expressed his consent and had the opportunity to reject the contract with impunity.
As a result, the court held that the clickwrap agreement was enforceable.
For more cases check Are clickwrap agreements held enforceable by American courts?