As a result, making some onerous condition accessible – or rather, relatively inaccessible – through a link may make the condition unenforceable. The Second Circuit found this to be the case in Schnabel v Trilegiant Corp (2d Cir, 7 September 2012), a proposed class action. The underlying dispute arose from online purchases of services from a variety of merchants. Once a transaction was completed, the consumer was given the option to click on a link to receive cash back from the purchase: doing so signed the consumer up for a discount programme offered by Trilegiant, a third party, which then billed the consumer’s credit card monthly (and which the plaintiffs objected to). Trilegiant sends a confirmation e-mail to each new customer it obtains in this way (although one of the plaintiffs claims he never received the e-mail). The e-mail contains a hyperlink to Trilegiant’s terms and conditions, including a waiver of the right to bring class proceedings in the event of a dispute, which must go to arbitration instead.
The specific issue was whether the arbitration clause could be enforced. Trilegiant argued that while the arbitration clause was not one the plaintiffs had expressly assented to, they had been put on notice of it and that was enough. Uh no, said both the district court in Connecticut and, on appeal, the Second Circuit. This wasn’t like a shrinkwrap licence, where the consumer has a realistic opportunity to read the terms he or she is agreeing to. A person can assent to terms without reading them, but it has to be clear to him or her that there are terms and that they can be adopted by a course of conduct (typically, using and not returning the product). Here, the arbitration clause was hidden in a document that was not obviously contractual in nature, and the consumer wasn’t even aware it was there. There are situations where previous dealings between the parties may make it reasonable to say that one party is on notice that it should check out additional terms that arrive after the contract is formed, but this wasn’t one of them: ‘Trilegiant effectively obscured the details of the terms and conditions and the passive manner in which they could be accepted.’ Continuing to pay for Trilegiant’s services didn’t amount to acceptance either. The plaintiffs had not agreed to arbitrate their disputes with Trilegiant and could pursue their class claim.