Sgouros v. TransUnion Corp.

United States Court of Appeals for the Seventh Circuit · Contracts

Contractsclickwrapbrowsewraparbitration clausemutual assentreasonable noticeinternet contractsobjective theory of assent

Facts

Sgouros bought TransUnion's online "3-in-1 Credit Reports, Credit Scores & Debt Analysis" product through a three-step website purchase process. On the second step, the page displayed a scroll box labeled "Service Agreement," but only a few opening lines were visible, a "Printable Version" hyperlink appeared nearby, and the button read "I Accept & Continue to Step 3." Bold text directly below told users that clicking authorized TransUnion to obtain personal credit information, but did not say the click accepted contractual terms. The arbitration provision appeared only in the full printable agreement, buried on page 8 of a 10-page document.

Issue

Did Sgouros form an agreement to arbitrate with TransUnion when he clicked through the website purchase process or completed the purchase, where the site did not clearly communicate that clicking or purchasing manifested assent to the service agreement?

Rule

Under Illinois contract law, formation of an online contract requires mutual assent judged objectively, and a website must provide reasonable notice that a user's click or use of the site constitutes assent to an agreement. In assessing notice, courts ask whether the webpage's physical presentation reasonably communicates the existence of the terms and whether the surrounding circumstances permit the user to become meaningfully informed of them. A user cannot be bound where the site does not clearly connect the click or purchase to acceptance of contractual terms and instead directs the user's attention to something else.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Patel buys a tenant-screening report from Lakeview Data Solutions on a website in Chicago, Illinois. On the payment page, a conspicuous hyperlink labeled "Terms of Purchase" appears immediately next to a button reading, "By clicking Complete Order, you agree to the Terms of Purchase," and Nina clicks without opening the hyperlink.

If Nina later sues and Lakeview moves to compel arbitration under a clause in the linked terms, what is the strongest argument that arbitration will be enforced under Illinois law?

Explanation. Under the majority's rule, online contract formation turns on objective manifestation of assent and reasonable notice. A site may bind a user when it clearly communicates the existence of terms and unambiguously connects the user's click to acceptance of them. Here, the hyperlink is clearly labeled and the button expressly states that clicking means agreement to the Terms of Purchase, which strongly supports assent even if Nina did not open the link. (Derived from Sgouros v. TransUnion Corp. (n.d.).)