PA Appellate Court Affirms Denial of Motion to Compel Arbitration Due to Inconspicuous Terms

The Superior Court of Pennsylvania recently affirmed a lower court’s denial of an amusement park’s attempt to compel a customer to arbitration.  The court held that the amusement park could not enforce the mandatory arbitration and class action and jury trial waiver provisions of its terms and conditions, which were buried in a hyperlink that the customer was not required to open or review.

The underlying case stems from the customer’s purchase of a season pass online and his subsequent class action lawsuit over an allegedly concealed ride closure for the entire season.  During the checkout process, the customer was presented with checkboxes and several hyperlinks to lengthy documents in small, single-spaced print (which the customer was not required to open or review), yet none of the mandatory screens needed to complete the transaction informed him that he was waiving his right to a jury trial or to participate in a class action. 

On appeal, the Superior Court held that because the critical waivers appeared only in the hyperlinked documents and were not brought to the customer’s attention in a clear and conspicuous manner, no valid agreement had been formed.  This holding is consistent with recent Pennsylvania precedent requiring clear notice before an online agreement can eliminate a person’s right to proceed in court, and the customer’s action is set to proceed in the lower court rather than through arbitration.