The United States District Court for the Northern District of California has found that a “sign-in wrap” agreement on Rocket Mortgage’s website, whereby a customer accepts the web-site’s terms and conditions by taking a confirmatory action on the site, is valid and enforceable. The plaintiff sought to apply for mortgage refinancing, the terms and conditions of which required all disputes to be resolved in Detroit, Michigan. Fedoroff v. Rocket Mortgage, LLC.
Mr. Federoff visited Rocket Mortgage’s website to apply to refinance his mortgage. While there, he was required to enter his contact information above a paragraph stating that by providing that information and clicking the confirm and continue button below, he agreed to the terms of use. “Terms of Use” was bold, underlined, capitalized, and a hyperlink.
Months later, Federoff filed a putative class action in federal court in San Francisco, alleging that Rocket Mortgage disclosed his personal data through tracking software on the site, alleging violations of California’s privacy laws. He then argued that Rocket Mortgage’s terms and conditions, including its forum selection clause requiring resolution in Detroit, provided insufficient notice because the hyperlink was “stuck in the middle of a very long and busy paragraph” and not separated from the surrounding text.
The District Court disagreed, finding that the “placement and visual characteristics of ‘Terms of Use’ provided reasonably conspicuous notice.” While precedent from the United States Court of Appeals for the 9th Circuit had found notices insufficiently distinctive, those cases involved issues such as tiny font in an unobtrusive color. The hyperlink here, however, was directly above the confirmation button. Further, it was bolded, underlined, and capitalized in “contrast to the surrounding text.” The court also noted that the context of the transaction, applying for mortgage refinancing, would put a reasonable consumer on notice to expect contractual terms and an ongoing relationship. This was not a one-time purchase of a small item. Accordingly, the court ordered the case transferred to the United States District Court for the Eastern District of Michigan.
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Mortgage, Forum, Clickwrap, Hybrid, Sign-In Wrap, Notice