In a recent decision by the U.S. Court of Appeals for the Ninth Circuit, the court reversed a district court’s ruling and compelled arbitration in the case of Massel v. Successfulmatch.com dba Millionaire Match. The appellate court concluded that the plaintiff consumer received reasonably conspicuous notice of the Service Agreement (containing the arbitration clause), to which the plaintiff assented by checking the box required for account creation and continued use of the website.
Background
The plaintiff initiated a putative class action lawsuit against the dating service, alleging that it unlawfully collected and disclosed biometric information, violating the Illinois Biometric Information Privacy Act. The dating service sought to compel arbitration based on an arbitration clause in its Service Agreement, which the consumer had agreed to when creating his account. The district court initially denied this motion, leading to an appeal.
Appellate Decision
The Ninth Circuit’s decision centered on whether the dating service provided “reasonably conspicuous notice” of its arbitration agreement, a key factor in determining the enforceability of online contracts. The court applied an “inquiry theory of notice,” which requires two elements for contract formation:
- Reasonably Conspicuous Notice: The website must clearly inform users of the terms they are agreeing to.
- Manifestation of Assent: Users must take an action, such as clicking a button or checking a box, that clearly indicates their agreement to the terms.
The test takes into account both the visual design of the webpages and the context of the transaction, which should be considered together. The dating service’s website looked like this:
The court found that the dating service’s website design and user flow provided adequate notice of the Service Agreement, including its arbitration provision. The court further explained that despite the hyperlinks not being in a contrasting color or capitalized, the website clearly required users to review and agree to the terms before accessing the service.
“‘That the links [to the Service Agreement and Privacy Policy were] not blue . . . or capitalized does not undercut’ a conclusion that Millionaire Match provided ‘reasonably conspicuous notice’ by using uncluttered visuals, with only a single, unrelated phrase in bold, to tether account creation and use of the website to the user’s review of, and consent to, the Service Agreement. The account creation screen was not ‘crowded’ with extraneous visuals, and the requirements to review and agree to the Service Agreement were in ‘the natural flow of [the user’s] actions.'”
Our Take
The ruling underscores the importance of clear and conspicuous presentation of terms in online agreements, particularly arbitration clauses. The court highlights that while visual design is important, the overall context, content, and user experience are crucial in determining whether users are adequately informed.
The decision also reinforces the principle that courts should avoid rigid, one-size-fits-all rules when evaluating online contract formation. Instead, they should consider the specific circumstances of each case.
