One of the more successful strategies when defending against class actions is to force the plaintiff out of court and into arbitration. That typically stops the case from including more individuals. But courts are often willing to nullify arbitration agreements based on technicalities.

Indeed, as shown by a recent decision from the United States Court of Appeals for the Seventh Circuit, even large, sophisticated businesses like Transunion Corporation occasionally fail to obtain valid consent to arbitration clauses. In that case, Sgouros v. TransUnion Corp., a consumer alleged that the company cheated him by selling him a version of his credit report that was 100 points lower than the version used by the car dealership he later patronized. TransUnion, citing an arbitration provision buried deep within its user agreement, tried to compel him to arbitrate. The appellate court affirmed the trial court’s ruling that Transunion’s click-to-accept process was not explicit enough to alert users to what they are agreeing to.

Although electronic closings are still a ways off for the real estate industry, some aspects of the business do take place over the internet. For those, the Seventh Circuit recommends the following test for acceptance of terms and conditions: “whether the web pages presented to the consumer adequately communicate all the terms and conditions of the agreement, and whether the circumstances support the assumption that the purchaser receives reasonable notice of those terms.” In the end, the court noted that it “cannot presume that a person who clicks on a box that appears on a computer screen has notice of all contents not only on that page but of other content that requires further action (scrolling, following a link, etc.).”

By contrast, for written contacts, there is normally a legal presumption that the signer read and accepted all the terms appearing in it. Nonetheless, business that want to improve the likelihood of success for their arbitration clauses should take extra steps to highlight those provisions, by, for instance, placing them in bold or requiring the customer to initial next to them.