Website owners who seek to bind visitors to the terms of an arbitration agreement must make those terms “reasonably conspicuous” under the law, and website visitors must “express unambiguous consent” to those terms. terms. This means that the smallest details – the font and color of the text, the color of the page, the location and appearance of hyperlinks and the “I accept” button – are of considerable legal importance. These seemingly small design details could mean the difference between a dispute being resolved in arbitration or litigation.
This was the question under study in Berman v Freedom Financial Network LLC, a case decided by the Ninth Circuit on April 5, 2022. A putative class of consumers sued website operators who allegedly obtained and used consumers’ contact information to make telemarketing calls in violation of consumer protection law by telephone. The websites contained a “Terms and Conditions” section in fine print that included a requirement that all disputes be resolved by arbitration. But the arbitration agreement itself was not part of the terms and conditions; it was only available if the consumer clicked on a hyperlink, which was neither capitalized nor in a different color than the surrounding text. And the website failed to inform users that clicking the big green “Continue” button next to the terms and conditions meant they accepted them.
These were among the details the Ninth Circuit focused on when it ruled that defendants’ arbitration agreements were unenforceable because notice of the terms was not “reasonably conspicuous” and consumers weren’t had not ‘unambiguously’ consented to the terms and conditions.
The majority opinion highlighted several issues related to the lack of visibility of the terms and conditions. For one thing, the font was “tiny” – “considerably smaller than the font used in surrounding website elements” and “barely readable by the naked eye”. Additionally, the Court held that other “visual elements” on the same page distracted the eye “from the most important part of the page”.
The Court also focused on the failure to identify the “hyperlinks”. Although the Court agreed that the hyperlink to the terms of the arbitration agreement was acceptable, the hyperlinked text was the same color and size as the rest of the terms and conditions. The Court explained: “Consumers cannot be required to hover their mouse over plain-looking text or click aimlessly on words on a page in an attempt to ‘find hyperlinks’”.
The Court also found insufficient evidence of assent, finding that simply clicking a large green button that read “Continue” (next to the phrase “I understand and agree to the terms and conditions which include arbitration mandatory”) did not show unambiguous assent, as there was no indication of the “legal significance” of clicking the “Continue” button.
The concurring opinion of the Court reaches the same conclusion, but insists on different details. After conducting a choice of law analysis (which the majority found unnecessary), the concurring opinion held that California law is a “grey area” with respect to “signature agreements” – those agreements that notify a user (after registering) that a separate agreement is required before the user can access the service. Finding the law so unstable, the Court said that web designers who “knowingly choose the login envelope [agreements] . . . virtually invite litigation” over applicability. Beyond the facts that the majority had already noted, the concurring opinion pointed out that an intermediate “I accept” button – asking if the website visitor consents to receiving daily emails – was confusingly placed, what Judge Baker called an “independent reason to find the notice”. . . . insufficiently visible. »
The case is a cautionary tale for both website owners and operators: when it comes to terms and conditions containing arbitration agreements, design matters.