## Facts

- Consumers filed a putative class action alleging Dell improperly charged “tax” on optional computer service contracts and asserted related claims, including negligence.
- Dell sold computers remotely and offered optional on-site service contracts, sometimes as agent for third-party providers; purchasers who selected a service contract were charged an amount labeled as tax.
- Mary DeFontes bought a Dell computer with a BancTec service contract and paid an amount designated as tax on the service contract.
- Dell relied on a “Terms and Conditions Agreement” that included an arbitration clause and stated that, “by accepting delivery,” the customer agreed to the terms.
- The terms were made available through a website hyperlink, on an invoice, and/or in materials shipped with the computer.
- Dell had a satisfaction/return policy, but did not clearly state that returning the product was the mechanism to reject the contract terms (including arbitration).

## Issues

1. Whether the arbitration clause in Dell’s Terms and Conditions Agreement was enforceable when the terms were provided via hyperlink/invoice/packaging and purported to bind customers upon “accepting delivery.”
2. Whether, under the agreement’s Texas choice-of-law provision, plaintiffs had reasonable notice and manifested assent sufficient to form an agreement to arbitrate.

## Decision

- The Rhode Island Supreme Court affirmed the order denying defendants’ motion to stay the case and compel arbitration.
- Applying Texas contract principles, the court held Dell failed to show reasonable notice and manifested assent to the arbitration provision.
- The court found it insufficient that Dell unilaterally declared acceptance of delivery to be assent when the arbitration term was not conspicuously presented and customers were not clearly told how to reject the terms.

## Legal Principles

- Contract formation for post-sale consumer terms requires reasonable notice of the terms and manifested assent by the buyer.
- A shrinkwrap-type arbitration clause is generally enforceable only when the seller clearly communicates that the buyer may reject the terms by returning the goods, and the buyer, after notice, retains the goods.
- A general satisfaction guarantee or return policy does not substitute for explicit notice that return is the method for rejecting additional contract terms, including arbitration.
- Enforceability of an arbitration agreement depends on objective assent under applicable state contract law selected by a valid choice-of-law clause.

## Conclusion

Because Dell did not provide conspicuous notice of the arbitration clause and did not clearly communicate a meaningful method to reject the post-sale terms, the plaintiffs did not manifest assent to arbitrate, and the case properly proceeded in court.


DeFontes v. Dell, Inc., 984 A.2d 1061 (R.I. 2009)