In the past three months, two federal appellate courts have issued multiple decisions concerning the enforceability of arbitration agreements contained in sign-in wrap agreements.  These three decisions—Chabolla v. ClassPass, Inc., 129 F.4th 1147 (9th Cir. 2025), Godun v. JustAnswer, LLC,  No. 24-2095 (9th Cir. Apr. 15, 2025), and Dhruva v. CuriosityStream, Inc., 131 F.4th 146 (4th Cir. 2025)—highlight the importance of the visual elements of the sign-up screen, which likely are determinative of the enforceability of your online Terms of Use and arbitration agreements.  

The Ninth Circuit: Chabolla v. ClassPass, Inc.

On February 27, 2025, the Ninth Circuit denied ClassPass’s motion to compel arbitration—finding that ClassPass’s sign-up process did not bind plaintiff to ClassPass’s Terms of Use and arbitration agreement, largely because the hyperlink to the terms was not displayed prominently enough.

ClassPass required users to navigate through four screens (a landing page and then three additional screens) in order to purchase a subscription.  ClassPass’s Terms of Use were presented on screens 1, 2, and 3 as a “sign-in wrap” agreement—i.e., the terms were linked during the sign-up process, but users did not actually need to read them before purchasing a subscription.  As we’ve blogged about previously, sign-in wrap agreements are enforceable so long as (1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound, and (2) the consumer takes some action, such as clicking a button, that unambiguously manifests their assent to those terms. 

The key questions for the Ninth Circuit were thus: (1) whether ClassPass’s sign-up screen provided sufficiently clear and conspicuous notice of that hyperlink, and (2) whether the plaintiff unambiguously manifested her assent to ClassPass’s Terms of Use. 

In analyzing the conspicuousness of the notice, the Ninth Circuit emphasized that the context of the transaction is critical.  In cases where users anticipate an ongoing relationship, users have reason to look for terms and conditions.  However, where users simply make one-off purchases, they are less likely to be on the lookout for fine print (so the notice presumably must be more conspicuous). Because ClassPass users did not sign up for an account—but instead simply purchased credits to be traded in for fitness classes—the Ninth Circuit found that the transaction could be considered a one-time purchase, rather than the formation of an ongoing relationship. According to the Ninth Circuit, “the vague nature of business with ClassPass” did not alert plaintiff “to look for additional terms.” 

Given this, the visual aspects of ClassPass’s sign-up page took on paramount importance.  The Ninth Circuit focused mainly on the first screen presented to users, as that was the only step of the sign-in process that provided users with a means to assent to the terms.  The Ninth Circuit carefully analyzed the design elements of this screen—e.g., font size, text placement, overall screen design, etc.—in analyzing whether a “reasonably prudent internet user” would have been on notice of ClassPass’s Terms of Use:

The court determined that the notice on this page “seems to fade into the irrelevancy of other aspects of the page.”  While the phrases “Terms of Use” and “Privacy Policy” are in blue font (which typically indicates a hyperlink), the rest of the sentence is in “notably timid” font—small gray font against a white background.  The Ninth Circuit also took issue with the placement of this sentence—noting that it is below the “action item” on the screen, and thus outside of the “natural flow.”

While the court did state that screens 2 and 3 provided more conspicuous notice (because it interrupted the natural flow of the action items on the screens), it declined to fully analyze those screens’ notice, because the plaintiff had no way of unambiguously manifesting her assent to the Terms of Use on those screens. 

Because the court found that “three faulty notices do not equal a proper one”, it held that the Plaintiff did not agree to be bound by the arbitration clause within those terms of use.

The Ninth Circuit: Godun v. JustAnswer, LLC

About a month-and-a-half later, on April 15, 2025, the Ninth Circuit again considered the enforceability of an arbitration agreement in a sign-in wrap agreement, finding again that the arbitration agreement was unenforceable because the plaintiffs did not agree to be bound by its terms.

In Godun, the various plaintiffs saw different landing pages and payment pages (which the court analyzed), including the following payment page:

The court carefully reiterated that there is no bright-line rule for whether a particular design element is adequate in every situation.  Indeed, the court cited its recent decision in Chabolla, and explained that it had “not created a checklist for website designers” nor had it “generated per se design rules that must be followed” in order to create an enforceable contact.  The court highlighted that each analysis of a website’s design would be fact intensive, and there was truly no “one-size-fits-all approach”. 

Analyzing the screen above, the court concluded that it did not need to consider the “reasonable conspicuousness” of the notice because the page failed to “explicitly advise users of what action would constitute assent to any terms they were provided with.” Because the page lacked an explanatory phrase about what clicking “connect now” would do, the users could not unambiguously manifest assent.

The Fourth Circuit: Dhruva v. CuriosityStream, Inc.

On March 10, 2025, the Fourth Circuit Court of Appeals reached a different conclusion—holding that CuriosityStream’s sign-in wrap agreement was enforceable.

While CuriosityStream’s notice was arguably less conspicuous than in ClassPass, the Fourth Circuit nonetheless granted CuriosityStream’s motion to compel arbitration.

A key difference was the context of the transaction—in CuriosityStream, users created accounts for ongoing subscription.  Thus, according to the Fourth Circuit, plaintiffs should have been on the lookout for hyperlinked terms that would govern their ongoing relationship with Curiosity Stream.  Prior to entering their payment information, users were presented with a paragraph that stated:  “By subscribing to Curiosity Stream, you agree that you’ve read our Terms of Use,” with the phrase “Terms of Use” written in orange text, and hyperlinked to connect to a page containing the Terms of Use:   

The hyperlinked Terms of Use stated on the first page, in all capital letters: “YOUR AFFIRMATIVE ACT OF USING AND/OR REGISTERING WITH THE SITES SIGNIFIES THAT YOU AGREE TO THESE TERMS OF USE. IF YOU DO NOT AGREE, DO NOT USE AND/OR REGISTER WITH THESE SITES.” Two paragraphs below that was a paragraph alerting users to an arbitration provision.

The Fourth Circuit held that the hyperlinked terms were conspicuous—the orange link was presented on an “uncluttered” background, close to the button the customer had to click to continue.  Users did not need to “scroll down” or “go exploring” to find CuriosityStream’s terms of use. 

The Fourth Circuit further held that users manifested assent to the terms of use by registering with the website because the website “expressly advised” them that registering with the website signifies that they agreed to the terms of use, and their clicks of the “Sign up now” button on the registration page “objectively and unambiguously manifested” their assent to those terms.  The court also explain that the registration button did not need to say “I accept” for clicking it to mean that the plaintiffs manifested assent.

TAKEAWAYS

These decisions underscore the critical importance of the visual elements and presentation of your online sign-up process.  Key considerations include:

1. Consider a Clickwrap Agreement:  Rather than using a sign-up action button to indicate assent to online terms, consider an unchecked box that requires users to acknowledge and agree to the online terms of use explicitly—especially if users are not entering into an ongoing subscription relationship. 

2. Visual Elements:  For sign-in wrap agreements, users should be given clear notice, on an uncluttered screen, that by pressing a certain button, they are manifesting assent to the online terms.  The language should be clear, such as, “By clicking here, you are agreeing to X”.  That notice should be in font similar in size to other font on the screen, and the hyperlinked terms should be in a different color font, bolded, underlined, and in “ALL CAPS”.