Here is a brief summary of the case In re Zappos.com, Inc. Customer Data Security Breach Litigation, 893 F.Supp. 2d 1058 (Dist. Ct. Nevada 2012):

–Users sued in multiple forums for damages due to a security breach.

  • Zappos filed a motion to compel arbitration in Las Vegas pursuant to its terms of use agreement, which was a typical browsewrap agreement which also gave Zappos the right to amend any of the terms as it saw fit.

–Zappos had a hyperlink on each page of its website to the terms but it was hard to see, being the same size and color as other insignificant links, and located ¾ of the way down the page.  The website never prompted or directed a user to the terms even when purchasing a product or opening an account.

–Court concluded that the plaintiffs may have never seen the terms, so in no way could be deemed to have actually or constructively agreed to them. No assent, no contract.

  • Sidenote: The Court also held the arbitration provision was an illusory contract (and therefore not enforceable) because Zappos was able to amend the Terms as it saw fit at any time. See Grosvenor v. Qwest Corp., 854 F. Supp. 2d 1021 (D. Colo. 2012) for this same holding.