Godun v. Justanswer LLC
For Publication (2025)
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Rule of Law:
For a 'sign-in wrap' agreement to be enforceable under California law, a website must provide reasonably conspicuous notice of the terms, and the user must unambiguously manifest assent. An unambiguous manifestation of assent requires the website to explicitly advise the user what specific action will constitute their agreement to the terms.
Facts:
- Plaintiffs Kseniya Godun, Moya McDowell, Latoya Foust, Kristie Nelson, and Tasha Davis used the website justanswer.com to ask questions.
- To ask a question, each plaintiff created an account and paid a fee ranging from $1 to $5.
- The website presented various signup and payment pages to the plaintiffs, which contained hyperlinks to the 'Terms of Service.'
- For plaintiffs Davis and Nelson, the advisory text with the hyperlink was in small, gray font and was not located immediately adjacent to the action button.
- For plaintiffs Godun, Foust, and McDowell, the payment pages contained a pre-checked box next to text that began 'I agree...' but did not explicitly state that clicking the 'Connect now' button would constitute acceptance of the terms.
- Paying the initial fee also enrolled the plaintiffs in a recurring monthly subscription costing between $46 and $60.
- JustAnswer's Terms of Service contained a provision requiring that all disputes be resolved through arbitration.
Procedural Posture:
- Plaintiffs filed a putative class action lawsuit against JustAnswer LLC in the United States District Court for the Northern District of California.
- JustAnswer filed a motion to compel arbitration, citing the arbitration clause in its Terms of Service.
- The district court denied JustAnswer's motion, finding that no valid contract to arbitrate was formed.
- JustAnswer LLC, as appellant, appealed the district court's denial to the United States Court of Appeals for the Ninth Circuit.
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Issue:
Does a 'sign-in wrap' agreement create a binding contract to arbitrate when the website's notice of terms is not reasonably conspicuous for some users and, for others, fails to explicitly state that clicking a particular button constitutes assent to those terms?
Opinions:
Majority - Judge R. Nelson
No. A binding contract is not formed under these circumstances. Applying California's two-step test for 'sign-in wrap' agreements, the court held that JustAnswer failed to prove contract formation. For plaintiffs Davis and Nelson, the notice of terms was not reasonably conspicuous because its small font, placement, and poor color contrast made it visually 'buried' and unlikely to be seen by a reasonably prudent user. For plaintiffs Godun, Foust, and McDowell, the agreement failed at step two because the advisal, while stating 'I agree,' did not explicitly link the act of clicking the 'Connect now' button to contractual assent. Circuit precedent requires such explicit advisement for there to be an unambiguous manifestation of assent.
Concurring - Judge R. Nelson
I concur with the judgment but write separately to critique the court's precedent. The analysis for visual conspicuousness (step one) has become too rigid, creating de facto rules about hyperlink appearance rather than focusing on what is reasonable to a prudent user. More importantly, the requirement for 'explicit advisement' in step two—demanding 'magic words' like 'By clicking...'—is an erroneous departure from traditional, objective principles of contract law, which only require that assent can be reasonably inferred from a user's conduct. The court's precedent deviates from the more sensible approach taken by other circuits, such as the Second Circuit, and should be revisited.
Analysis:
This decision solidifies and clarifies the Ninth Circuit's stringent two-part test for the enforceability of 'sign-in wrap' agreements, strictly adhering to the precedent set in Berman. It establishes a high bar for online businesses, requiring not just visually prominent notice but also explicit language linking a specific user action to contractual assent. The ruling highlights a potential circuit split with the Second Circuit, which has adopted a more flexible, traditional contract law approach that does not require 'magic words' for assent. This decision will likely compel website designers in the Ninth Circuit to use specific 'By clicking, you agree' language to ensure their terms of service are enforceable.
