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

Mon, Sep 10th 2012 2:30pm — Tim Cushing

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."

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Filed Under: arbitration, terms
Companies: barnes and noble

20 Comments

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radarmonkey (profile), 10 Sep 2012 @ 2:51pm

B&N ticked me off, too!
The least B&N should be sued for is having a piss-poor inventory system! I jumped on the bandwagon trying to get one of the TouchPads. My order went through! Yay!

Next day I got the, "I'm sorry, but we're out of stock. Your order is canceled." email.

How can anything in their terms of service cover the fact that they are selling things they don't have?
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Anonymous Coward, 10 Sep 2012 @ 2:51pm

It wont amount to shit. They'll just make the minor change and continue with business as usual.
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Tigerhawk (profile), 10 Sep 2012 @ 2:54pm

Arbitration is the devil
In my experience, arbitration is where scoundrels go to get away with crap that a judge would never tolerate.

Arbitrators have no incentive to find in favor of the consumer. Do you, the consumer, have any clue who to pick as an arbitrator? No, of course not. It's a crap shoot for you. So the arbitrator has no incentive to cater to you, and is effectively selected by the company. Being an arbitrator pays REALLY well. Arbitrators are usually lawyers with subject matter expertise, and they usually charge their hourly rate.

If you become known as the arbitrator who doesn't side with the company that picks you, how long do you think you'll keep getting these cherry gigs?

Yeah, exactly.

Arbitration can be a useful tool in some contexts. Domestic law, employment disputes, etc. But in commercial transactions, I absolutely hate it.
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Anonymous Coward, 10 Sep 2012 @ 2:55pm

this is a disgraceful attitude for companies to take. even worse, it is a disgrace that courts allow companies to go down this route. basically, the customer has no rights but the company would be extremely quick to condemn if customers went elsewhere. this arbitration only option was, i believe, brought in by Sony along with various other game manufacturers. i see Microsoft is starting the same thing. funny how politicians dont even bother to try to stop this sort of malpractice either, just like they dont try to do anything to curb the entertainment industries from doing just as they like. but hey, the entertainment industries are paying the salaries!
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Rikuo (profile), 10 Sep 2012 @ 3:02pm

If Companies want to say that by merely clicking a button, they can then say I've read, understood and agree to the points...how about providing some evidence? How about, not just having an "I agree" button, also some sort of test? Like a question that asks you to copy and paste from a specific section or three; or how about Jeopardy style? (Have an answer, but the user must search the T&C for the actual question).
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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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Tigerhawk (profile), 10 Sep 2012 @ 3:06pm

Re:
To the contrary, there is a federal law that REQUIRES courts to honor the outcomes of arbitration proceedings, and getting an arbitration outcome overturned is almost impossible. The statute requires judges to confirm and enforce an arbitration award even if the law was incorrectly applied. About the only situation where you can avoid an arbitration award is if you have clear evidence of misconduct, like bribing the arbitrators. It's a nightmare to deal with.

The courts have little choice. There's a statute on this, and it's constitutional, so they have to enforce it. Sometimes you can get the arbitration provision itself pitched as unconscionable. One company required the consumer to arbitrate in like Sweden or something, and the court knocked that one out of the park.
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Anonymous Coward, 10 Sep 2012 @ 3:13pm

The government shouldn't allow forced arbitration its clearly there to screw consumers.
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Anonymous Coward, 10 Sep 2012 @ 3:22pm

Also companies wonder why people resort to piracy when they screw their customers geez I wonder why.
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Anonymous Coward, 10 Sep 2012 @ 3:25pm

Re:
I'll take "EULAs That Are Longer Than the Average Human Leg" for 200, Alex.
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Andrew (profile), 10 Sep 2012 @ 4:01pm

Though, as Eric Johnson says, this won't help with purchases, this does seem like a big win for the TOS attached to websites.

While the cost of implementing the ruling is de minimis for buying stuff, forcing people to click 'I agree' before accessing website content is a huge barrier that would absolutely kill traffic and conversion rates. Would it apply in this case too?
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Anonymous Coward, 10 Sep 2012 @ 4:23pm

Well a TOS should apply to normal people but instead they make it so fucking confusing you need law school just to understand it.

I'm not saying every place is like this but plenty are.. There are also plenty of people that get even most of the complex TOS some places list.

I get most of it however I refuse to read a TOS that's comparable in size to a FUCKING NOVEL! Plus when you start digging into the TOS there will definitely be parts you will not agree with I don't care who you are.
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Adrian Lopez, 10 Sep 2012 @ 4:38pm

I'd like to see a bill amending the Federal Arbitration Act that would prohibit binding arbitration clauses in adhesion contracts. If you want me to agree to binding arbitration, such agreement better be in the form of a negotiated contract between parties having equal negotiating power.
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Wally (profile), 10 Sep 2012 @ 5:51pm

TOS
I have a NewEgg, an Amazon, a GOG.com, and aSteam account. They either pop up the TOS upon account creation, or make you install software. Hell, even Apple has common sense not to pull the crap Barnes And Noble have. All the companies I named except for Barnes and Noble have excelent customer service :-)
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bigpicture, 10 Sep 2012 @ 6:03pm

Re: Vote with your $$$
There is a solution to this bad business practice. DON'T BUY ANYTHING FROM BARNES & NOBLE. I know I won't ever buy anything from them, or Apple either, or any other anti-consumer (rip off the customer anti-trust) company. I will read Amazon's fine print, and if it is not anti-consumer, I will buy from them.
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Rekrul, 10 Sep 2012 @ 8:32pm

Re: Re: Vote with your $$$
There is a solution to this bad business practice. DON'T BUY ANYTHING FROM BARNES & NOBLE. I know I won't ever buy anything from them, or Apple either, or any other anti-consumer (rip off the customer anti-trust) company.

What do you do when every single company starts doing the exact same thing?

The court ruling saying that companies can forbid legal action through their terms of service needs to overturned.

While we're at it, the Supreme Court needs an enema to flush out the crap...
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G Thompson (profile), 10 Sep 2012 @ 9:06pm

Talking about Barnes & Noble.. I think they haven't learnt anything from that case

http://www.pixiq.com/article/pixiq-refusing-to-migrate-public-usernames-in-pinac-transfe
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Anonymous Coward, 11 Sep 2012 @ 2:21am

Re: Re:
you're wrong- they're longer than the average human. Not just a human leg.
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Jesse (profile), 11 Sep 2012 @ 7:53am

Americans really need to draft some legislation that basic rights cannot be forfeited in contract (like Canada). What's next, a terms of service that compels you to vote for [insert political party here]???

Moreover, the courts should find forced arbitration clauses unconscionable.
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Martin Thomas (profile), 11 Sep 2012 @ 8:19pm

They sometimes try to stop you reading the agreement
I wonder how long before someone goes to court when a company goes out of their way to discourage people from reading the terms. It may be hard to prove, but why else do so many companies put the terms into an absurdly small text box?

If you could prove that they had deliberately tried to discourage people from reading the terms, would that invalidate them?
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