James Madison said that: “In suits at common law, trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature.” The drafters of the California Constitution shared this view and expressly provided that “Trial by jury is an inviolate right and shall be secured to all . . . .” Cal. Const., Art. 1, §16. As a result, California courts scrutinize contracts that purport to waive the parties’ right to a jury trial. Indeed, the California Supreme Court has held that a pre-dispute agreement waiving the right to a jury trial is unenforceable in California. Grafton Partners L.P. v. Superior Court, 36 Cal.4th 944 (2005).
An important exception to the rule against pre-dispute jury trial waivers is the right to agree to arbitration. In arbitration, a private judge resolves the parties’ disputes, and there is no jury. According to the Grafton Partners Court, pre-dispute arbitration agreements are enforceable because they are expressly permitted by the California Code of Civil Procedure (§ 1280, et seq.). However, because of the importance given to the right to trial by jury, arbitration agreements will only be enforced if parties knowingly agree to them.
The district court agreed with Mr. Nguyen, and the Ninth Circuit affirmed the decision. The court described the kind of Internet contract at issue as a “browsewrap” agreement in which a website’s terms and conditions are set forth via a hyperlink. Such contracts are only enforceable if users have actual or constructive knowledge of their terms. The court found that there was no evidence that Barnes & Noble’s website provided actual or constructive notice of the arbitration agreement. The mere placement of a hyperlink on a website is not noticed – especially where there is no prompting to take action or other procedures to show that the user agrees with the linked text. In contract, enforceable “clickwrap” agreements specifically require users to manifest their assent by clicking a button on a dialog box or pop-up window.
This case provides an important reminder to always clearly set forth any arbitration provision in commercial contracts. This is one of the reasons that many real estate contracts expressly require the parties to initial arbitration provisions rather than merely checking a box. While such initialing is not required to enforce an arbitration provision, there must be evidence that the parties were aware of the provision and agreed to it.
Additionally, for separation agreements involving the division of assets and custody rights, the services of notary public Mississauga are imperative. Only through proper procedures, it can be ensured that arbitration provisions are enforced.