Recent Developments in Consent to Terms and Conditions: Insights from Dhruva v. CuriosityStream, Inc.
The recent decision by the U.S. Court of Appeals for the Fourth Circuit in Dhruva v. CuriosityStream, Inc. has significant implications for how courts interpret consent to terms and conditions on websites. This case highlights the importance of clear and conspicuous notice in forming enforceable online agreements such as terms and conditions, including those with arbitration agreements.
Case Background
Rohan Dhruva and Joshua Stern, residents of California, created accounts and subscribed to CuriosityStream, an online documentary streaming service, in 2020 and 2021. They later discovered that CuriosityStream was sharing their event data with Meta, leading them to file a putative class action lawsuit in Maryland, alleging violations of the federal Video Privacy Protection Act and California state law (we have covered these and other CIPA-type wiretapping claims here).
Procedural History
The United States District Court for the District of Maryland initially denied CuriosityStream’s motion to compel arbitration. The court found that while CuriosityStream’s website provided adequate notice of its Terms of Use through a conspicuous hyperlink, users were not clearly informed that clicking the “Sign up now” button constituted an agreement to those terms (bolded for emphasis).
CuriosityStream appealed this decision to the Fourth Circuit, which reversed the district court’s ruling. The appellate court held that Dhruva and Stern had reasonable notice that registering for the service would constitute assent to the website’s terms, including an arbitration clause.
Lessons Learned
Terms and conditions and other online agreements, such as privacy policies, bring various legal considerations, including those relating to enforceability, with some of the most notable lessons from this case highlighting the following components:
- Reasonable Notice and Assent: The Fourth Circuit emphasized that users had reasonable notice of the terms of use due to the website’s design and content. The court concluded that a reasonably prudent user would understand that registering for the service constituted assent to the terms, including the arbitration clause.
- Clear and Conspicuous Notice: While the court found the notice sufficient, the dissenting opinion highlighted concerns about the clarity of the notice. Judge Wilkinson argued that the website did not explicitly state that subscribing constituted an agreement to the terms, potentially undermining the requirement for clear and conspicuous notice.
- Implications for Future Cases: This decision underscores the importance of ensuring that website terms are clearly presented and that users understand they are agreeing to these terms by using the service. It may influence future cases in the Fourth Circuit regarding arbitration agreements and the adequacy of notice.
Dissent and Future Implications
Judge Wilkinson’s dissenting opinion serves as a reminder of ongoing debates about consumer protection and transparency in contractual agreements. His concerns suggest that other courts might scrutinize more closely whether the notice provided by websites is truly clear and conspicuous, potentially leading to different outcomes in similar cases.
In conclusion, Dhruva v. CuriosityStream, Inc. highlights the need for businesses to ensure that their terms and conditions are presented in a manner that provides clear and reasonable notice to users. While the Fourth Circuit found CuriosityStream’s notice sufficient, the dissent underscores the importance of explicit language in contractual agreements to avoid future disputes. Specifically, there should be language noting that clicking to consent to the online terms means the user agrees with them, not just that the user has read them.
To illustrate, see the below (the Terms and Privacy Policy should also be hyperlinked):
- DO: “By subscribing to Curiosity Stream, you agree that you have read and you agree to our Terms of Use and Privacy Policy.”
- DON’T: “By subscribing to Curiosity Stream, you agree that you’ve read our Terms of Use and Privacy Policy.”
Practical Advice for Online Terms
- Ensure Clear Notice: Make sure that terms of use and arbitration clauses are clearly and conspicuously displayed on your website.
- Explicit Language: Use explicit language to inform users that by using your service, they agree to the terms of use.
- Website Design: Design your website to put users on notice that they are entering into a contractual agreement when they register or subscribe and optimally place the consent boxes.
- Review Legal Precedents: Stay updated on legal precedents in your jurisdiction regarding arbitration agreements and terms of use to ensure compliance.
