Visual comparison in online contract formation

Codyv. Jill Acquisition LLC, --- F.Supp.3d ----, 2025 WL 1822907, No. 25-CV-937 TWR (KSC) (S.D. Cal. Jun.30, 2025)

I wouldn’t usually blog a consumer class action that wasjust about arbitration, but I want to highlight this one because of the use ofimages. Not only does the court include the visuals of what the consumer saw(in the course of deciding that the arbitration agreement wasn’t clearly enoughdisclosed to be binding), it compares those to visuals from past cases. However, it ultimately distinguishes cases that are visually similar because of the different context--a one time purchase as a "guest" compared to signing up for an ongoing relationship. Whether or not you agree with the result, kudos to the judge to looking beyond text to what the precedents actually showed.

This is otherwise a standard “deceptivediscount/misleading reference price” case. JJill argued that the plaintiff agreedto arbitrate. 

Shefirst had to click “add to bag.” 

​Then“continue checkout.” 

Shewas then prompted to add her shipping address and select a shipping method: 

Then a payment method:

Then ​“Proceedto Order Review” and the order review page:

​Directly above the “Place Order” button was this statement: “By clicking ‘PlaceOrder’ you agree to J.Jill’s Terms of Use & Privacy Policy.”“Terms of Use” was a blue, underlined hyperlink. Those terms explicitly calledattention to the arbitration clause at the top of the page:

Therewas a section called “Binding Arbitration Agreement and Class Action Waiver”under the “DISPUTE RESOLUTION” heading.

Itwas undisputed that the plaintiff didn’t have actual notice. “[A]n enforceablecontract will be found based on an inquiry notice theory only if: (1) thewebsite provides reasonably conspicuous notice of the terms to which theconsumer will be bound; and (2) the consumer takes some action, such asclicking a button or checking a box, that unambiguously manifests his or herassent to those terms.” “This test has two aspects: the visual design of thewebpages and the context of the transaction.”

Conspicuousnotice “is a matter of whether an advisal is ‘displayed in a font size andformat such that the court can fairly assume that a reasonably prudent Internetuser would have seen it.’ ” The Ninth Circuit “deemed the [below] noticeinsufficient”:  

“The text disclosing theexistence of the terms and conditions on the[ ] websites [wa]s the antithesisof conspicuous” because it was “printed in a tiny gray font considerablysmaller than the font used in the surrounding website elements, and indeed in afont so small that it [wa]s barely legible to the naked eye,” whereas “[t]hecomparatively larger font used in all of the surrounding test naturallydirect[ed] the user’s attention away from the barely readable critical text.” Further,the hyperlink was “simply underscore[d],” without the “[c]ustomary designelements denoting the existence of a hyperlink[,] includ[ing] the use of acontrasting font color (typically blue) and the use of all capital letters.”

More recently, the NinthCircuit concluded that, “[c]onsidering the [following] notice in the fullcontext of the transaction, [it] would not expect a reasonably prudent internetuser to be on inquiry notice of the contract” because “[t]he advisal [wa]s not... located directly above or below the action button and [wa]s displayed inrelatively small text.”

Butthe Ninth Circuit approved different displays as sufficient: 

With these, “a reasonable user would have seen the noticeand been able to locate the Terms via hyperlink” because the “notice [wa]sconspicuously displayed directly above or below the action button” and “the‘Terms of Use’ hyperlink [wa]s conspicuously distinguished from the surroundingtext in bright blue font, making its presence readily apparent.”

Another Ninth Circuitcase “found a single screen sufficiently conspicuous”:

This one “explicit[ly]” included “clear and legible”“notice on the final order review page, directly below key information such asthe purchase total, and directly below the button [the plaintiff had] tapped tocomplete his purchase ... on an uncluttered page[,] ... not hidden or obscured”with “the hyperlinked phrase ‘terms of use’ ... colored bright green—contrastedagainst the surrounding white background and adjacent black text” and “the samecolor as other clickable links on the page, suggesting clearly that it is ahyperlink.”

Also, the Ninth Circuitreversed a district court order that found that these images failed to providereasonably conspicuous notice:

Here,the notice at issue was visually on the acceptable side. While the text of the notice mightbe “considerably smaller than the font used in the surrounding websiteelements,” it wasn’t “sosmall that it is barely legible to the naked eye,” or placed on a clutteredpage or obscured. Nor was it in a color lighter than surrounding text of asimilar size. The hyperlink was both underlined and in a blue font, like otherhyperlinks on the page. “Finally and critically,” the text of the notice was directlybelow the “Place Order” button, not “outside of the user’s natural flow.” 

Butthat wasn’t enough. Courts also have to “consider ... the ‘full context of thetransaction,’ ” ... such as whether the type of transaction ‘contemplatesentering into a continuing, forward-looking relationship’ that would begoverned by terms and conditions.” Courts are more likely to conclude that auser anticipating “some sort of continuing relationship” would expect to bebound by terms, whereas a user “who simply purchases goods or avails herself ofa one-time discount offer” would be less likely to form such an expectation. Relevantconsiderations include: (1) whether the transaction contemplates a“continuing relationship” by creating an account requiring a “full registrationprocess,” (2) whether the user is entering a “free trial,” (3) whether a userenters “credit card information,” and (4) whether the user has downloaded anapp on their phone, representing an intent to have continued access to the app.

Here,the plaintiff opted to check out as a guest, distinguishing this case from otherswhere the Ninth Circuit found inquiry notice. The California Court of Appealnoted that “most consumers would not expect to be bound by contractual terms”when engaging in a “trivial” transaction like “the sale of a single item, suchas a pair of socks.” Because “the onus must be on website owners to put userson notice of the terms to which they wish to bind consumers,” defendant failedto meet its burden of establishing that its notice was sufficiently conspicuousto bind the plaintiff to arbitration.