Does an Amazon click create an arbitration agreement?

Click Amazon's "Place Your Order" button. Did you notice the sentence that says, "By placing your order, you agree to Amazon.com's privacy notice and conditions of use"? And did you notice the "Conditions of Use" link at the bottom of the page? Well, if you clicked through to the Conditions of Use, you might have noticed an agreement to arbitrate any disputes.

When Dean Nicosia sued Amazon claiming a Consumer Product Safety Act violation, Amazon moved to dismiss based on the arbitration clause. But Nicosia said he didn't know about it, didn't see the notice, etc. And guess what? The 2nd Circuit held that "reasonable minds could disagree on the reasonableness" of Amazon's notice to Nicosia, so the case can't be dismissed without further proceedings. Nicosia v. Amazon.com (2nd Cir 08/25/2016) [Full text of opinion].

This case is unusual because Amazon did not move to compel arbitration. Instead, Amazon filed a Rule 12(b)(6) motion to dismiss. That motion basically argues that Nicosia failed to state a claim. So there's a lot of potential evidence that a trail court can't consider when deciding the motion. The only evidence to be looked at according to the 2nd Circuit is the allegations in Nicosia's complaint, Amazon's order page, and the Conditions of Use link.

Applying the law of Washington State, "The question is whether a reasonably prudent offeree would know that the … Conditions of Use governed, such that her purchase manifested implied assent to the additional terms." And here's how the 2nd Circuit looked at that question:

  • Notably, unlike typical ʺclickwrapʺ agreements, clicking ʺPlace your orderʺ does not specifically manifest assent to the additional terms, for the purchaser is not specifically asked whether she agrees or to say ʺI agree.ʺ  
  •  Nothing about the ʺPlace your orderʺ  button alone suggests that additional terms apply, and the presentation of terms is not directly adjacent to the ʺPlace your orderʺ button so as to indicate that a user should construe clicking as acceptance. 
  • The message itself ‐‐ ʺBy placing your order, you agree to Amazon.comʹs . . . conditions of useʺ ‐‐ is not bold, capitalized, or conspicuous in light of the whole webpage. 
  • Proximity to the top of a webpage does not necessarily make something more likely to be read in the context of an elaborate webpage design. 
  • There are numerous other links on the webpage, in several different colors, fonts, and locations, which generally obscure the message.
  • Although it is impossible to say with certainty based on the record, there appear to be between fifteen and twenty‐five links on the Order Page, and various text is displayed in at least four font sizes and six colors (blue, yellow, green, red, orange, and black), alongside multiple buttons and promotional advertisements. 
  • Further, the presence of customersʹ personal address, credit card information, shipping options, and purchase summary are sufficiently distracting so as to temper whatever effect the notification has. 

If Amazon had moved to compel arbitration instead of moving to dismiss under Rule 12(b)(6), there would have been an evidentiary hearing to flush out more information. It looks to me that Amazon was hoping to get the court to hold – as a matter of law – that its web design alone compelled the conclusion that a customer making an order also consented to the Conditions of Use. Amazon did not win on that point. But Amazon also has not lost its case. There are factual issues remaining as to whether Nicosia agreed to arbitrate.