Online vendors generally use e-commerce terms and conditions to establish contracts with consumers. These terms are usually presented in scroll boxes or via hyperlinked text, with a button for the consumer to click signaling acceptance. In Sgouros v. TransUnion Corp., the Seventh Circuit provides helpful guidelines for ensuring that these online terms and conditions are expressly accepted by the consumer, creating an enforceable contract (No. 15-1371, (7th Cir. Mar. 25, 2016)).

On March 25, 2016, the U.S. Court of Appeals for the Seventh Circuit affirmed the District Court's denial of TransUnion's motion to compel arbitration, holding that the company's online terms and conditions failed to create an enforceable contract.

Gary Sgouros purchased a credit report from TransUnion's website in 2013, with the goal of using the score to negotiate an auto loan. The online purchase form contained:

Sgouros clicked on the "I Accept" button and proceeded with the purchase. Afterwards, when Sgouros met with an auto dealership to discuss a loan, he learned that the credit score he purchased from TransUnion was 100 points higher than the one the dealership had obtained. He sued TransUnion under Illinois and federal consumer protection laws. TransUnion responded with a motion to compel arbitration based on the arbitration clause in the online service agreement. The District Court for the Northern District of Illinois denied the motion, finding that no contract had been created.

The Seventh Circuit agreed. The court found that TransUnion had failed to provide adequate notice to Sgouros that by clicking "I Accept," he was agreeing to the company's terms and conditions. The court determined the form did not clearly label either the scroll box or the linked document as the terms and conditions of sale because it used the more generic terms "Service Agreement" and "Printable Version." The court also found TransUnion's language about accessing private information to be misleading, because the consumer might believe that in clicking "I Accept" he was only granting permission for this access. The court held that because Sgouros could not have known he was agreeing to TransUnion's terms, including the arbitration clause, the contract and clause were not enforceable.

This case illustrates the importance of clearly communicating the terms and conditions of sale to consumers in online purchases. Because online sales are unilateral contracts, courts will look to evidence of mutual assent in determining enforceability.