In a recent decision upholding the denial of a motion to compel arbitration, a panel of the Ninth Circuit provided new guidance about the formation of online contracts under California and New York law.1 The court held that, to place a consumer on inquiry notice of terms and conditions on a website, the website must provide “reasonably conspicuous” notice of the terms and the consumer must “unambiguously manifest[]” acceptance of those terms. In the course of its analysis, the court provided several examples. Berman follows on the heels of a recent California state appellate court decision, Sellers v. JustAnswer LLC, 73 Cal. App. 5th 444 (2021), that similarly concluded that a company had failed to provide “sufficiently conspicuous” notice of its terms. Businesses that seek to enter into online contracts with consumers in California and New York—especially when their terms include arbitration agreements with class waivers—should consider reviewing their current website flows in light of these decisions.
