One other Roundup of On-line Contract Formation Instances

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Another Roundup of Online Contract Formation Cases

Time for a further summary of the cases of online contract conclusion.

HomeAdvisor, Inc. v Waddell, 2020 WL 2988565 (Tex. Ct. App. June 4, 2020)

The court considers this to be a valid conclusion of a contract:

The court declares:

The submission page was clear, with just a few spaces to enter information and a large orange submission button that read "By submitting this request, you agree to our terms and conditions" directly below. The text with the hyperlink to the Terms of Use is dark on a light white background, easy to read, and the same size as most of the text on the screen. The entire screen is instantly visible with no scrolling required. The hyperlink can be clicked and the terms of the agreement can be viewed before the user sends a request for service. Although the terms of use are lengthy, the arbitration provision is clearly highlighted in bold, capitalized letters. HomeAdvisor's representation of the User Agreement is not misleading or confusing. Similar presentations have consistently been found to be conspicuous and have brought the website user upon request / constructive notification of the website's terms of use. Indeed, it has been found that cluttered and complicated login screens provide sufficient notification. Accordingly, we conclude that HomeAdvisor's submission screen was somewhat obtrusive to informing respondents of the company's terms of use, including the arbitration provisions.

The respondents' consent to HomeAdvisor's Terms of Use was clear for legal reasons. The mechanism for manifesting consent – clicking the "Submit" button – is timed to the receipt of the Company's services by the site user and the user is clearly advised that clicking the "Submit" button is such Indicates approval. In other words, the reasonably prudent user would have understood that the only way to get referral services from HomeAdvisor is to agree to the company's terms and conditions

Overall a good result for HomeAdvisor. HomeAdvisor could easily have done better, e.g. For example, placing the call-to-action over the orange button, increasing the font size, and linking the orange button action to the call-to-action – or better yet, adding a mandatory checkbox for the call – to act that requires approval before the orange button becomes active becomes.

Acaley v Vimeo, Inc., 2020 WL 2836737 (N.D. Ill. June 1, 2020)

Despite some dubious implementation decisions, the court confirmed the contract design:

Acaley has been adequately informed at least twice that its use of the Magisto app constitutes acceptance of the terms of use. First, he received such a notification when he first opened the app and looked at its welcome page, on which, as indicated, the following statement appeared: "By continuing, I agree to the terms." This statement, as it appears on several Websites published in Hubbert would alert a reasonable person that there are general terms and conditions associated with continued use of the app. In addition, Acaley received appropriate notice that he was accepting Magisto's Terms of Use when he signed up for the free trial of the subscription plan through a web browser on his iPad. As indicated, he accessed a webpage that had a button that said "Create Account" and just below it showed a statement in a smaller but still more eye-catching font that said, "By starting, you agree to our Terms of Use and Privacy Policy ". with hyperlinks to the respective documents. This statement would alert a reasonable person that there are conditions associated with creating an account.

The plaintiff attacked the clarity of the call to action, but it was good enough:

He claims that the statement “By continuing, I agree to the terms” only reflected the language of the “Continue with Facebook” button, not the “More Options” hyperlink that he clicked. He claims a person in his shoes did not understand that clicking on the hyperlink constitutes acceptance of the terms. Although the language could certainly have been more precise, a reasonable person would have understood that the "More Options" hyperlink provides more options for further use of the app, and that continued use of any kind equates to consent to the Terms of Use. This understanding would have been immediately confirmed by the window that appeared after a person had clicked on "More Options": the heading read "Continue With" and directly below that were various ways a person could continue to use the app.

He claims that due to the inaccurate language of the website, someone in their shoes would not have known that clicking the button to create an account on Facebook was a “start” to using the program and accepted the terms. This claim goes too far. A sane person would understand that the word "start up" refers to creating an account – in fact, there doesn't seem to have been a way to use the Magisto from this page without creating an account – and that Facebook used to create one Account is used he or she accepted the terms of use.

Wow, it would be so easy to fix all of that. Your call to action should be in the form of an "if x, then y" statement, with X pointing to the action button on the page or, better yet, a mandatory check box on its own.

The good news for the defense came to an end as the court ruled that the plaintiff's BIPA claim fell outside the scope of the Terms of Use.

Berman v Freedom Financial Network, LLC, 2020 WL 5210912 (N.D. Cal. Sept. 1, 2020)

The TOS arbitration clause failed. The defense has a problem with bringing the correct evidence to court:

Bhadania broadly explains how he "recreated" the multiple web pages that each plaintiff would have seen if they had visited the websites, based on a unique visitor ID generated for each session and "newly generated images" of the websites. The exhibits submitted by Bhadania correspond to blanket contracts with no clear indication that these plaintiffs have consented to them. Fluent chose to remove other pages from the multi-page "flow" for these website visits, which may have indicated that those particular users interacted with those particular pages. Given that plaintiffs each make statements denying seeing elements of these sites, and defendants have failed to provide full information to authenticate the exhibits, the court finds that material facts are in dispute.

Remember that when you sign your online contract, you need the right content terms, the right formation process, and the right evidence to prove both. When I tell my students, I am assuming that everyone who worked on the contract had left the company at the time of the litigation.

Then the court says these pages do not clearly indicate acceptance of the terms of use.

The court declares:

There is no "I Agree" check box or button for the Terms and Conditions. As in Nguyen, the hyperlink to them is just near the button that the user needs to interact with in order to proceed. The "That's right, go on!" The "Next" and "Next" buttons clearly relate to entering other information on the page without agreeing to the terms and conditions. Although the user has to interact with the page and click a button in order to continue using it, that click is completely separate from consent to the terms and conditions or mandatory arbitration. In addition, the phrase “I understand and agree to the terms and conditions, which contain mandatory arbitration and data protection provisions,” is formatted in black on a white background that is extremely small compared to the larger, more colorful and contrasting fonts This makes it difficult to read on a large, high-resolution monitor, let alone a mobile device. The fact that the very small text that contains the hyperlink to the general terms and conditions also uses the words "including mandatory arbitration" does not change the analysis, as the website does not require consent to this statement.

So much failure and yet so avoidable. The call-to-action speech was not adequately linked to the desired action, and the call-to-action was too small and visually indistinct. Good rule of thumb: the call-to-action font should be the same size as the largest font elsewhere on the page. I am sure you can do better than these defendants.

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