Fluent Essays

The Situation Sally calls sounding pretty upset. You ask her what happened, "Did you lose a 'Soufflé' today or something?" Not laughing, she starts to tell you she read that a disabled person was discriminated against by a franchise business because the company’s official website does not have an accessibility policy. A disabled person sued based on the denial of access to the company’s website and won! You state, "I guess that’s possible, denial of accessibility is an established legal ground to sue under the Americans with Disabilities Act (ADA). But, how in the world could a webpage not be accessible to a disabled person? Or, for that matter, how would it be accessible? How does that happen?" Sally replies, "I forgot one thing; the person suing was blind!"  "It still doesn’t make sense to me," you state.   Your Response You and Sally must investigate the Dunkin' Donuts® case because the company intends to integrate its webpage into the core of the business. You need to get ahead of this issue. Using the Dunkin' Donuts case, list the basis of the violation of the ADA. Analyze the facts and issues using the IRAC format. Compare the applicability of the ADA to your device. Do not forget to note the steps you must implement to guarantee that your website is compliant with the American with Disabilities Act. Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 1 Avoiding Pitfalls in Online Sales to Consumers by Practical Law Commercial Transactions Maintained • USA (National/Federal) A Practice Note discussing the common issues manufacturers and retailers face when selling goods and services online to consumers. This Note describes steps prospective sellers can take to identify and limit common issues in online sales to consumers, including the avoidance of pitfalls in online contract formation, pricing and payment terms, shipping and handling , warranties, waivers, telemarketing, New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA), and the Americans with Disabilities Act (ADA). Contents Governing Terms Binding Consumer to the Terms Consumer Review Fairness Act Proper Notice of Terms and Conditions Clickwrap or Scrollwrap Terms Warranties Manufacturer Versus Retailer Warranty Pre-Sale Availability and Disclosure Rules Binding Arbitration, Waiver of Jury Trial, and Class Action Waiver Consumer’s Right to Opt Out Pitfalls in Payment and Pricing Terms Pitfalls in Shipping and Handling Terms Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 2 Increasing Claims of Excessive Shipping and Handling Fees in California Collecting Phone Numbers to Contact Consumers New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act New Jersey Supreme Court Holds Plaintiffs Must Suffer Actual Harm TCCWNA Compliance Americans with Disabilities Act Web Content Accessibility Guidelines 2.0 and 2.1 Periodic Review of Governing Terms As online sales of goods and services continue to erode in-store sales, more businesses are moving to establish an online presence. The growing number of online sales has also made for a rapidly changing legal environment. This Practice Note offers guidance on prevalent issues manufacturers and retailers face when selling online. Governing Terms A seller who is preparing to launch an online store should have terms in place on its website that reflect its actual practices, including: • Website terms of use. Terms of website use govern the general use and access of a website. The terms do not necessarily involve the purchase of goods and services. These terms are often designed to protect the website owner, content on the site, and its service provider from potential liability to site users by: • prohibiting unauthorized reproduction of material contained on the site; and Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 3 • ensuring the site is not used in ways that may be harmful, including by prohibiting illegal or undesirable user behavior. • A privacy policy. Online sellers should have a policy in place that governs the collection, storage, use, and disclosure of personal information, as online sales typically require, at a minimum, the consumer’s: • name; • credit card number, expiration date, and security code (which is considered sensitive information); • billing address; and • delivery address. • E-commerce terms. These terms and conditions govern the online sale and purchase of goods and services, including billing procedures, shipping and handling, and return policies (see Standard Documents, Terms and Conditions for Online Sales by Retailers to Consumers and Terms and Conditions for Online Sales By Manufacturers to Consumers). Although it is important for online sellers to provide website terms of use and a privacy policy, this Practice Note focuses on issues that arise regarding e-commerce terms, specific to the sale of goods and services online. For more information on general website terms and privacy policies, see Standard Documents, Website Terms of Use and Website Privacy Policy: Drafting Note: Website Privacy Policies. Binding Consumer to the Terms A seller should clearly communicate the e-commerce terms to consumers who visit and make purchases by the seller’s online store. To ensure that terms are legally binding, they must be implemented in a way that forms an enforceable contract between the site owner and the consumer. To form a contract, the consumer generally must: • Have actual or constructive notice of the terms. • Affirmatively or impliedly assent to the terms. Because online sales are generally interpreted as unilateral contracts, courts often look to evidence of mutual assent in determining their enforceability. Without the opportunity to negotiate the terms, courts have sometimes held that, because the consumer lacks the necessary element of mutual assent, e-commerce terms constitute an unenforceable contract of adhesion. In other cases, courts have refused to enforce certain provisions, such as choice of law and choice of forum, because they were deemed to be unconscionable or against public policy. To increase the likelihood that a court does not deem e-commerce terms unenforceable, the seller should provide proper notice and use clickwrap or scrollwrap terms to ensure that the consumer has ample opportunity to manifest acceptance of the terms. Consumer Review Fairness Act Regardless of the method of notice used, under the Consumer Review Fairness Act of 2016 (CRFA), which was enacted to protect consumers who write honest public reviews of products, services, and business conduct, the company should not include a non-disparagement clause in its terms. The CRFA prohibits companies from including standard contract provisions that threaten or penalize people for posting honest reviews that fall into any of the above categories. Companies cannot use clauses that: • Bar or restrict a consumer’s ability to review a company’s products, services, or conduct. • Impose a penalty or fee on a consumer who gives a review. http://www.westlaw.com/Document/I7011d153c94511e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/I7011d153c94511e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/Ia0bc5db16d5311e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/Ibb0a1497ef0511e28578f7ccc38dcbee/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/I03f4d7b1eee311e28578f7ccc38dcbee/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a879570 http://www.westlaw.com/Document/I03f4d7b1eee311e28578f7ccc38dcbee/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a879570 Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 4 • Require consumers to give up their intellectual property rights in the content of their reviews. For more information on the CRFA, see Practice Note, Consumer Reviews in the Era of Social Media: Consumer Review Fairness Act of 2016. Proper Notice of Terms and Conditions Online sellers should be able to demonstrate that the purchaser notices or should notice the terms on the site. There are several ways to alert the consumer that the transaction is subject to the terms, including: • Using prominent and conspicuous language on the site, such as all caps or boldface type. • Clearly labeling the terms while avoiding vague language, such as labeling them “Terms of Use,” “Terms of Sale,” or “Terms of Use and Sale.” • Placing the terms in a box the user must scroll through before the user can proceed. • Informing the user that the site is governed by the terms, which are then presented to the user in the form of a hyperlink, which the user must click before they can enter the site. For more information on providing notice of terms, see Standard Document, Terms and Conditions for Online Sales by Manufacturers to Consumers: Drafting Note: Online Contract Formation. Clickwrap or Scrollwrap Terms Online sellers should use clickwrap or scrollwrap terms to display their website terms of use, privacy policy, and e-commerce terms and conditions. Clickwrap and scrollwrap terms should be used as opposed to browser terms, because both provide added measures that have been interpreted by the courts to increase the likelihood of their enforceability. Browser Terms Unlike clickwrap and scrollwrap terms, browser terms do not require an affirmative action by the consumer. A user instead is informed that, by simply using the website, he is agreeing to be bound to the terms. Courts have held browser terms unenforceable, reasoning that the consumer did not have actual or constructive notice of the terms and therefore could not have assented to them. Clickwrap Terms Unlike browser terms, clickwrap terms require the user to perform an affirmative action before being granted access to the site or the ability to make an online purchase. Also referred to as click-through terms, clickwrap terms: • Require consumers to click an “I Accept” or “I Agree” button or check a box following language indicating they have read and agree to the terms. • Are in close proximity to the “I Accept” or “I Agree” button, such as on the same webpage or in the same pop-up window. • Should not allow consumers to access the website or place an order until after they click the button or check the box (if using a checkbox, it should not be pre-checked). Courts have generally found that manifesting assent by using clickwrap terms creates an enforceable contact because they require an affirmative action by the consumer. Scrollwrap Terms http://www.westlaw.com/Document/I872eed849a5011e8a5b3e3d9e23d7429/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a198772 http://www.westlaw.com/Document/I872eed849a5011e8a5b3e3d9e23d7429/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a198772 http://www.westlaw.com/Document/Ia0bc5db16d5311e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a485749 http://www.westlaw.com/Document/Ia0bc5db16d5311e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a485749 Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 5 Scrollwrap terms are clickwrap terms that also require the user to physically scroll to the bottom of the terms to find the “I Accept” or “I Agree” button. Courts have generally found that this adds another layer of protection, by ensuring that the user has had reasonable notice of the terms, allowing the user to assent to the terms, creating an agreement that is even more likely to be enforceable. The main reason online sellers choose not to use scrollwrap terms is inconvenience. An online seller should weigh the effect the use of scrollwrap terms may have on traffic to their website and sales against the added protect ion scrollwrap terms provide. Warranties The Magnuson-Moss Warranty-Federal Trade Commission Act (Magnuson-Moss Act) (15 U.S.C. §§ 2301 to 2312) governs written warranties on consumer goods. It does not require manufacturers or sellers to offer written warranties on consum er goods. However, many choose to provide written warranties to give consumers confidence in buying their products or services. The Magnuson-Moss Act only applies when a business has decided to provide a warranty on a consumer product (see Practice Note, The Magnuson-Moss Warranty Act for Consumer Goods). The E-Warranty Act of 2015 (E-Warranty Act) (PL 114-51) amended the Magnuson-Moss Act to: • Allow warrantors to satisfy the written warranty requirements by making their written warranties accessible in a digital format on the manufacturer’s websites. • Require that a manufacturer that chooses the website-warranty option to display on the product, packaging, or manual: • the full website address where the warranty terms can be obtained; and • a reasonable means of contacting the manufacturer to obtain and review the warranty’s terms, such as the manufacturer’s phone number or mailing address. Manufacturer Versus Retailer Warranty Online manufacturers and retailers often include written warranties within their e-commerce terms. A retailer who sells a third-party manufacturer’s products on its website generally provides different terms. Retailers Although online retailers may choose to offer a warranty, they instead frequently choose to merely pass along the manufacturer’s warranty obligations to the consumer, disclaiming any warranties regarding the manufacturer’s product, service, or manufacture (for an example, see Standard Document, Terms and Conditions for Online Sales by Retailers to Consumers: Section 6). Manufacturers If a manufacturer that sells its own products on its website, though not obligated to offer a written warranty, chooses to provide a warranty, it must comply with: • The Magnuson-Moss Act. • Federal Trade Commission (FTC) regulations under the Magnuson-Moss Act regarding: • the disclosure of written consumer product warranty terms and conditions (16 C.F.R. §§ 701.1 to 701.4); • the pre-sale availability of written warranty terms (16 C.F.R. §§ 702.1 to 702.3); and http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000546&cite=15USCAS2301&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=25620BC1E4162EA6F8FF6D2AB60135243A470B7DF4AC82F9C20D35CD6DB114AA&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000546&cite=15USCAS2312&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=B73E68E99BA720581C8B0CE9E044E9E2D25782551E0A6C6B0AAAE9CD3BFBCC83&contextData=(sc.Search) http://www.westlaw.com/Document/I7847ebc5a0ae11e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=l&pubNum=1077005&cite=UUID(IC0FC3A8057-9411E59B3DC-38A09D39552)&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=SL&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=091C1D1CBB215FD303A9006B87ABBB1ED39A595A1F54000E8632BD3E30A8CBC5&contextData=(sc.Search) http://www.westlaw.com/Document/I7011d153c94511e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a184905 http://www.westlaw.com/Document/I7011d153c94511e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a184905 http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS701.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=D0C645E3CFE0D4DAB7B1C1A0DC41AAE813D9F862E993D4C6D3B644342A8D045E&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS701.4&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=F95B05CCDCB3052F88033F39E5A795E74ED12FC8A5E4C670021FECCA0213E6C4&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS702.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=09B5BD70073403F7110CCB0C42B2C1503A30A851C7DBB375B1CF6BD00B1A77DF&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS702.3&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=70379033608428C4FCD90F32986F0A5546CC3F9A7723D1CF40E5EB2FE6C734BB&contextData=(sc.Search) Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 6 • informal dispute settlement procedures (16 C.F.R. §§ 703.1 to 703.8). • Applicable state laws. The federal rules also generally prohibit warrantors from: • Disclaiming or modifying implied warranties (see Standard Document, Terms and Conditions for Online Sales by Manufacturers to Consumers: Drafting Note: Implied Warranties). • Using deceptive warranty terms. • Using tie-in sales provisions (see Practice Note, The Magnuson-Moss Warranty Act for Consumer Goods: Using “Tie-In Sales” Provisions). If a manufacturer or seller has decided to include a warranty, it must then decide whether to offer a full or limited warranty. Written warranties on consumer goods that cost more than $10 must be titled either “Full Warranty” or “Limited Warranty.” The warranty title should be featured clearly and conspicuously at the top of the warranty. A warranty is considered a limited warranty if it does not meet all the federal minimum standards for a full warranty under the Magnuson-Moss Act. A full warranty is one that: • Provides warranty service to any consumer who owns the product during the warranty period (and is not limited to the first purchaser). • Remedies product defects and malfunctions within a reasonable time and free of charge. • Does not impose any limitations on the duration of any implied warranties. • Allows the consumer to receive a refund or free replacement if the product is still defective after the manufacturer has made a reasonable number of attempts to fix it. • Does not impose any duty on the consumer as a precondition for using the warranty, other than the duty to notify the manufacturer of the defect. (15 U.S.C. § 2304.) To learn more about the differences in limited and full warranties, see Standard Documents, Limited Consumer Product Warranty and Full Consumer Product Warranty. Pre-Sale Availability and Disclosure Rules Written warranties on consumer products that cost more than $15 must be easy to read and clearly and conspicuously disclose certain information. The E-Warranty Act changed the FTC’s rules on: • Pre-sale availability of written warranty terms (the Pre-Sale Availability Rule) (16 C.F.R. §§ 702.1 to 702.3). • Disclosure of written consumer product warranty terms and conditions (the Disclosure Rule) (16 C.F.R. §§ 701.1 to 701.4). Pre-Sale Availability Rule The Pre-Sale Availability Rule requires a warrantor to make its warranty available to consumers before they purchase the covered goods. As amended by the E-Warranty Act, the rule gives online sellers the option of providing warranty terms exclusively in an accessible digital format on the warrantor’s website, provided that the warrantor also: • Informs consumers of how to obtain warranty terms in a clear and conspicuous manner on the product, its packaging, or its manual, including: http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS703.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=643C87B336BF96D12231B0A847A2AB3D46477AB1C0DD7FA29A243A6F767F42CC&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS703.8&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=A01F46C3161965E43AB73E35E149C912AB00BF8C19918E0EA415A718EA9C898D&contextData=(sc.Search) http://www.westlaw.com/Document/Ia0bc5db16d5311e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a815866 http://www.westlaw.com/Document/Ia0bc5db16d5311e598dc8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a815866 http://www.westlaw.com/Document/I7847ebc5a0ae11e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a123450 http://www.westlaw.com/Document/I7847ebc5a0ae11e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a123450 http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000546&cite=15USCAS2304&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=49C3593AC4D13ED91C3F6F1C6304BFBEA69DF75897DFED699547AB2C3DCE2AF9&contextData=(sc.Search) http://www.westlaw.com/Document/I0a9596f6f5a211e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/I0a9596f6f5a211e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/Ife52e3e5ad4911e498db8b09b4f043e0/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS702.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=09B5BD70073403F7110CCB0C42B2C1503A30A851C7DBB375B1CF6BD00B1A77DF&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS702.3&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=70379033608428C4FCD90F32986F0A5546CC3F9A7723D1CF40E5EB2FE6C734BB&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS701.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=D0C645E3CFE0D4DAB7B1C1A0DC41AAE813D9F862E993D4C6D3B644342A8D045E&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS701.4&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=F95B05CCDCB3052F88033F39E5A795E74ED12FC8A5E4C670021FECCA0213E6C4&contextData=(sc.Search) Massie, Raymond 6/7/2019 For Educational Use Only Avoiding Pitfalls in Online Sales to Consumers, Practical Law Practice Note... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 7 • the website address where the warranty terms can be reviewed; and • the phone number, postal address, or other non-digital means for consumers to request a copy of the warranty terms. • Provides a hard copy of the warranty terms promptly and free of charge on request by the consumer. • Ensures warranty terms posted online are clear, are conspicuous, and remain accessible to consumers. • Sufficiently informs consumers of the warranty terms in a way that allows the consumer to readily identify the terms that apply to the specific warranted product. (16 C.F.R. § 702.3.) Disclosure Rule Before the E-Warranty Act, the Disclosure Rule required warrantors to disclose any limitation on the duration of implied warranties on the face of the warranty. The E-Warranty Act revised the definition of “on the face of the warranty” to include an option for a warranty posted online. The new rule allows “on the face of the warranty” to mean: • On the first page of the warranty (where the warranty text begins), if the warranty is printed on one or more sheets of paper or one or more sides of a single sheet of paper. • On the page that the warranty text begins on, if the warranty is printed as part of a larger document, such as a use and care manual. • In close proximity to the location where the warranty text begins, if the warranty is on a website or otherwise displayed electronically. (16 C.F.R. § 701.1.) Binding Arbitration, Waiver of Jury Trial, and Class Action Waiver The Magnuson-Moss Act encourages fair and quick consumer complaint settlements outside of court. Federal law allows warrantors to set up informal alternative dispute resolution mechanisms as part of their warranties. The alternative dispute mechanism must comply with several requirements (see Practice Note, The Magnuson-Moss Warranty Act for Consumer Goods: Alternative Dispute Resolution Mechanisms). Once a warrantor has established a dispute resolution mechanism that complies with the requirements, consumers must first use that mechanism before they can sue the warrantor for damages under the Magnuson-Moss Act. Consumer’s Right to Opt Out A court may find an arbitration clause unconscionable if it does not offer the consumer party (or the party with less bargaining power) the right to opt out of the arbitration provision. Unconscionability is a recurring theme in disputes over class arbitration waivers in consumer contracts, where the contracts are not negotiated at arm’s length and may be contracts of adhesion (see Standard Document, Terms and Conditions for Online Sales by Retailers to Consumers: Section 12(c) and Standard Clause, Class Arbitration Waiver (US): Right to Opt Out). Pitfalls in Payment and Pricing Terms Established consumer protection principles require that advertisements of price not be false or deceptive. Sellers should inform their customers of certain terms that may affect the price of the goods, including: http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS702.3&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=70379033608428C4FCD90F32986F0A5546CC3F9A7723D1CF40E5EB2FE6C734BB&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=16CFRS701.1&originatingDoc=I92c0dec272d611e79bef99c0ee06c731&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=D0C645E3CFE0D4DAB7B1C1A0DC41AAE813D9F862E993D4C6D3B644342A8D045E&contextData=(sc.Search) Massie, Raymond 6/7/2019 For Educational Use Only Dunkin’ Donuts Website Violates the ADA: Eleventh Circuit, Practical Law Legal Update... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 1 Dunkin’ Donuts Website Violates the ADA: Eleventh Circuit by Practical Law Commercial Transactions Law stated as of 06 Aug 2018 • USA (National/Federal) On July 31, 2018, the United States Court of Appeals for the Eleventh Circuit reversed and remanded the district court’s dismissal of Dennis Haynes v. Dunkin’ Donuts LLC. The Eleventh Circuit held that Dunkin’ Donuts’ website violated Title III of the Americans with Disabilities Act (ADA) because it assisted in the use of Dunkin’ Donuts stores yet was inaccessible to the blind. On July 31, 2018, the United States Court of Appeals for the Eleventh Circuit (Eleventh Circuit) held in Dennis Haynes v. Dunkin’ Donuts LLC that Dunkin’ Donuts violated the Americans with Disabilities Act (ADA) (42 U.S.C. §12188) because its website “facilitates the use of Dunkin’ Donuts shops, which are places of public accommodation,” but was not accessible to the blind (2018 WL 3634720). Background Dennis Haynes, who is blind, sued Dunkin’ Donuts for violating Title III of the ADA because its website was not compatible with screen reading software for the blind. Haynes sought declaratory and injunctive relief under the ADA, as well as attorney’s fees. The district court dismissed Haynes’ complaint for not stating a plausible claim for relief under Title III of the ADA, stating that the plaintiff failed to allege a connection between the barriers he faced when accessing the Dunkin’ Donuts website and his inability to access Dunkin’ Donuts products and services at its stores. Haynes appealed to the Eleventh Circuit. Analysis Haynes argued that the Dunkin’ Donuts website should be accessible to the blind under the ADA because: • Dunkin’ Donuts stores are a place of a public accommodation. • The Dunkin’ Donuts website is a “service, facility, privilege, advantage, benefit and accommodation” of the Dunkin’ Donuts stores. Dunkin’ Donuts argued that Haynes failed to state a claim because: http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000546&cite=42USCAS12188&originatingDoc=If3c9abaf969611e8a5b3e3d9e23d7429&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=1C770408CF878FD370896823D2A6D3FAC614CCDCDDA3894D8A8F2C767E68F106&contextData=(sc.Search) http://www.westlaw.com/Link/Document/FullText?findType=Y&serNum=2045159719&pubNum=0000999&originatingDoc=If3c9abaf969611e8a5b3e3d9e23d7429&refType=RP&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=PLDocumentLink&billingHash=AE10806BF553C95D4AD43533F92FE23E4E45FBB1E20EE22D2935FD17EFC2E6BE&contextData=(sc.Search) Massie, Raymond 6/7/2019 For Educational Use Only Dunkin’ Donuts Website Violates the ADA: Eleventh Circuit, Practical Law Legal Update... © 2019 Thomson Reuters. No claim to original U.S. Government Works. 2 • Although its shops are a place of public accommodation, its website is not. • Its website is not “a good, service, facility, privilege, or advantage of its shops.” The Eleventh Circuit held in favor of Haynes. The court stated that the ADA prohibits discrimination against the disabled by preventing their full enjoyment of goods, services, facilities, privileges, or accommodations at places of public accommodation. In addition, the prohibition under the ADA includes tangible and intangible barriers that disabled people face. Here, the website facilitates the use of Dunkin’ Donuts stores, which are places of public accommodation. Moreover, the website denies Haynes access to the services of the Dunkin’ Donuts stores that are available on the Dunkin’ Donuts website, which includes information about the stores’ products, store location information, and the ability to purchase gift cards online. Failure to make those services available to the blind violates the ADA. The court reversed the district court’s dismissal and remanded for further proceedings. Implications This decision expands the reach of the ADA to websites that primarily provide information about a business’ physical location and the goods and services sold at a business’ physical location. This decision may open the door to an increasing number of lawsuits over website accessibility under the ADA against businesses that are defined as places of public accommodation. Businesses should review their websites to ensure they comply with the ADA. For more information about website compliance under the ADA, see Legal Update, Is Your Website ADA Compliant? and Practice Note, Avoiding Pitfalls in Online Sales to Consumers: Americans with Disabilities Act http://www.westlaw.com/Document/I79e823d54a3811e89bf199c0ee06c731/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search) http://www.westlaw.com/Document/I92c0dec272d611e79bef99c0ee06c731/View/FullText.html?originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Search)#co_anchor_a000025