Original Contract Required Arbitration Of Dispute, New Terms Exempted Consumer Claim From Arbitration, And Website Visitor Was Not Aware Of New Contract Terms.
Rachel Stover attempted to prosecute a class action complaint against Experian, alleging that Experian had provided her with a credit reporting score represented to be useful, but essentially useless, because the score was based on a formula that lenders would not rely upon. Two contracts were involved: an original 2014 contract that she entered into with Experian, and that included an arbitration provision, as well as a "change-of-terms" provision purporting to bind her to contract changes, and a 2018 contract that exempted certain claims (including her claims) from arbitration. Each time she accessed the website, she would manifest assent to the changes to the then current terms of the agreement. Or would she?
The district court required her to arbitrate, finding that her claims were not covered by the 2018 agreement, and she appealed. Stover v. Experian Holdings, Inc., et al., 19-55204 (9th Cir. 10/21/20) (Smith, Owens, Cardone). The 9th Circuit affirmed the order requiring arbitration, but on another ground, namely, that the parties were not bound by the terms of the 2018 contract that could have exempted Stover's claims from arbitration.
"This case. . . requires us to address whether a mere website visit after the end of a business relationship is enough to bind parties to changed terms in a contract pursuant to a change-of-terms provision in the original contract," write Judge Smith. And the panel holds "it does not."
COMMENT: Compare and contrast the the internet contract with a paper contract. If a paper contract with changes in 2018 had been drafted by Experian and handed to the customer in 2018, could the customer have enforced it against Experian? Generally, a contract can be enforced against the signatory, even by the recipient who has not signed the contract, and generally, the recipient of the contract is presumed to be charged with its contents and to have read it, even if the recipient has bad eyesight and is not wearing glasses. But the situation here is a little different, because the change-of-terms provision does not create a requirement that Stover read the 2018 contract, the new contract was presented in the form of a browserwrap rather than a click-wrap, making it uncertain Stover received actual notice of the terms. And apparently Stover did not allege she knew the terms of the 2018 contract. So here, based on specific facts, there was a lack of contract formation. It was not enough that the drafting party, Experian, knew the terms of the contract, to create a meeting of the minds.
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