On August 18, 2014, in Nguyen v. Barnes & Noble Inc., the US Court of Appeals for the Ninth Circuit affirmed the district court's denial of Barnes & Noble Inc.'s motion to compel arbitration, reasoning that Barnes & Noble's website's Terms of Use (TOU) did not provide sufficient notice for Nguyen, a plaintiff putative class representative, to unambiguously assent to the TOU's arbitration provision (No. 12-56628, (9th Cir. Aug. 18, 2014)).

In August 2011, Barnes & Noble cancelled orders for a Touchpad handheld tablet because of unexpectedly high demand. Subsequently, Nguyen, on behalf of himself and a putative class of consumers, sued Barnes & Noble in the US District Court for the District of Arizona alleging deceptive business practices and false advertising in violation of California and New York law. Barnes & Noble moved to compel arbitration, arguing Nguyen was bound by its website's TOU, including the TOU's arbitration provision.

Nguyen argued that, because he neither clicked on the TOU hyperlink nor actually read the TOU, he neither had notice of nor assented to the TOU and therefore could not be bound by the TOU's arbitration clause. Barnes & Noble countered that its TOU put Nguyen on constructive notice of the arbitration provision. The district court agreed with Nguyen, finding Nguyen lacked sufficient notice to be bound by the TOU. Barnes & Noble appealed.

On appeal, the Ninth Circuit, applying New York law, affirmed the district court's finding that no contract was formed between Nguyen and Barnes & Noble because Nguyen had neither actual nor constructive notice of the TOU's terms and therefore could not have assented to the TOU's arbitration provision. In so holding, the court differentiated website "clickwrap" or "click-through" agreements (which require that users indicate their assent to the website's terms of use) with "browsewrap" agreements (which do not). Acknowledging that a browsewrap agreement can, under proper circumstances, create a binding contract on the internet, browsewrap agreements like Barnes & Noble's TOU do not provide the necessary actual or constructive notice needed to establish the essential element of mutual assent where:

The court further reasoned that:

Further citing the courts' traditional reluctance to enforce browsewrap agreements against individual consumers, the Ninth Circuit held that because Nguyen had insufficient notice of Barnes & Noble's TOU he did not enter into an agreement with Barnes & Noble to arbitrate his claims.