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Sgouros v. TransUnion Corp. - 817 F.3d 1029 (7th Cir. 2016)

Rule:

In Illinois, as in many states, the law governing the formation of contracts on the Internet is still in the early stages of development. But there is no reason to think that Illinois's general contract principles do not apply. Formation of a contract requires mutual assent in virtually all jurisdictions; Illinois courts use an objective approach to that question. Under the objective theory, intent to manifest assent in Illinois is revealed by outward expressions such as words and acts. The parties do not need to share the same subjective understanding as to the terms of the contract. But there must be a meeting of the minds or mutual assent as to the terms of the contract. Generally, a party who signs a written contract is presumed to have notice of all of the contract's terms.

Facts:

Hoping to learn about his creditworthiness, Gary Sgouros purchased a "credit score" package from the defendant, TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. It turned out, however, that the score he had bought was useless: it was 100 points higher than the score pulled by the dealership. Believing that he had been duped into paying money for a worthless number, Sgouros filed this lawsuit against TransUnion. In it, he asserts that the defendant violated various state and federal consumer protection laws. Rather than responding on the merits, however, TransUnion countered with a motion to compel arbitration. It asserted that the website through which Sgouros purchased his product included (if one searched long enough) an agreement to arbitrate all disputes relating to the deal. The district court concluded that no such contract had been formed and denied TransUnion's motion. TransUnion has appealed from that decision to the Court of Appeals for the Seventh Circuit.

Issue:

Was a binding contract formed between Sgouros and TransUnion where the website through which Sgouros purchased his product included (if one searched long enough) an agreement to arbitrate all disputes relating to the deal?

Answer:

No

Conclusion:

On review pursuant to 9 U.S.C.S. § 16(a)(1)(B), the Seventh Circuit ruled that the district court properly denied TransUnion’s motion to compel arbitration. In drafting an online agreement for a credit score purchase, TransUnion undid whatever notice it might have been furnishing in its bold text block by explicitly stating that a click on the button constituted assent for TransUnion to obtain access to Sgouros’ personal information. The credit score purchase site did not contain any requirement that a purchaser agree to abide by any terms and conditions, nor did it warn the user that by completing a purchase he would be bound by the terms. TransUnion could not manufacture notice of an arbitration clause where there was none.

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