11th Circuit Rejects TOS Formation–Tejon V. Zeus

Key Takeaways

• 11th Circuit labels Zeus’s TOS as unenforceable browsewrap
• Hyperlink buried in small gray text, not conspicuous
• Court limits wrap taxonomy to clickwrap or browsewrap
• Arbitration clause deemed invalid without clear notice
• Dissent claims hyperlink was reasonably noticeable

Pulse Analysis

The 11th Circuit’s opinion in Tejon v. Zeus sharpens the legal landscape for digital contract formation. While lower courts have tolerated a spectrum of “wrap” formats—clickwrap, browsewrap, sign‑in‑wrap—the majority in this case forced a binary taxonomy, treating Zeus’s layered notice as a browsewrap. By anchoring its analysis in the Berman precedent, the court reiterated that without an affirmative user action, such agreements are vulnerable to challenge. This approach aligns with the Ninth Circuit’s emphasis on conspicuousness but diverges by refusing to recognize intermediate formats that could satisfy user awareness.

Central to the ruling is the court’s strict conspicuousness standard. The hyperlink to the terms was rendered in a dim gray font, same size as surrounding text, and placed beneath large red buttons that demanded user interaction. The majority concluded that a reasonable internet user would not notice the link, rendering the arbitration clause unenforceable. The dissent, however, argued that the link’s central placement made it visible, highlighting the lack of empirical guidance on what constitutes “reasonable notice.” This split underscores the uncertainty businesses face when designing UI elements that reference contractual terms, especially those limiting dispute resolution.

For practitioners, the takeaway is clear: rely on clickwrap or scrollwrap mechanisms that require an explicit click or scroll acknowledgment. UI designers should prioritize high‑contrast, larger fonts, and distinct colors for TOS links, and explicitly reference critical clauses like arbitration. As courts continue to scrutinize layered notices, companies that fail to adapt risk costly litigation and the loss of contractual protections. Embracing best‑practice disclosure not only mitigates legal risk but also builds consumer trust in an increasingly regulated digital marketplace.