## Facts

- Unikrn, Inc. and Unikrn Bermuda, Ltd. (collectively, Unikrn) ran an online sale of digital tokens intended for use on Unikrn’s esports websites for playing, wagering, and viewing esports-related content.
- Unikrn set up a dedicated token-sale site where customers created accounts and completed several verification steps before purchasing tokens.
- On an address-verification page, users had to enter a physical street address and check a box next to the statement: “I have read and understood Unikrn Token sale Terms of Service and the Privacy Policy, and hereby agree to them.”
- The phrase “Terms of Service” appeared in blue text and contained an embedded hyperlink to a document titled “UNIKRN BERMUDA LTD TERMS OF TOKEN SALE” (the terms of token sale).
- The page did not require users to click the hyperlink to open the terms before checking the box or continuing the registration flow.
- The hyperlinked terms began with a prominent capitalized notice stating the document contained a binding arbitration clause and a class-action waiver and instructed users not to purchase tokens if they did not agree.
- In September 2017, John Hastings accessed the token-sale website, created an account, and purchased tokens.
- In 2018, Hastings filed a putative class action alleging the token sale violated federal securities laws.
- Unikrn moved to compel arbitration under the arbitration clause in the hyperlinked terms of token sale.
- Hastings opposed the motion, arguing he did not agree to arbitration because a reasonable user would not realize “Terms of Service” was a hyperlink and because the checkbox referred to “Unikrn Token sale Terms of Service,” while the linked document was titled “UNIKRN BERMUDA LTD TERMS OF TOKEN SALE.”
- The trial court denied the motion to compel arbitration, and Unikrn appealed.

## Issues

1. Did Hastings assent to the arbitration clause in the hyperlinked token-sale terms by checking a required box stating he read, understood, and agreed to the “Terms of Service” and then proceeding with registration and purchase?
2. Did the difference between the checkbox’s reference to “Unikrn Token sale Terms of Service” and the hyperlinked document titled “UNIKRN BERMUDA LTD TERMS OF TOKEN SALE” prevent contract formation?

## Decision

- The Court of Appeals reversed the trial court’s order denying Unikrn’s motion to compel arbitration.
- The court held the online interface provided reasonable notice of the terms and that Hastings manifested assent by checking the agreement box and continuing the transaction.
- The court concluded the hyperlinked “UNIKRN BERMUDA LTD TERMS OF TOKEN SALE” document was the set of terms referenced on the page, and the title difference did not defeat assent.
- The case was returned for enforcement of the arbitration agreement (including the class-action waiver contained in the same terms).

## Legal Principles

- Arbitration is a matter of contract; a court must determine whether the parties formed an agreement to arbitrate before compelling arbitration.
- Contract formation under Washington law turns on objective manifestations of assent, judged by what a reasonable person would understand from the parties’ words and conduct.
- Online terms are enforceable when the user is given reasonable notice of the terms and takes an action that clearly indicates agreement (such as checking a required box stating the user has read and agrees to the terms and then proceeding).
- A user is not required to open or read a hyperlinked agreement to be bound when the interface makes the existence of the terms and the act of agreement clear and conditions progress on the user’s assent.
- A minor mismatch between the on-screen label for terms and the title of the hyperlinked document does not defeat assent when the hyperlink is the identified path to the governing terms for the transaction.
- Policies favoring arbitration do not replace the need for contract formation, but once assent is shown, courts enforce arbitration clauses according to their terms.

## Conclusion

The Court of Appeals held that Unikrn’s token-sale registration page gave reasonable notice that “Terms of Service” was a hyperlinked set of transaction terms and that checking the required box and proceeding to purchase constituted assent to those terms, including the arbitration clause and class-action waiver; it therefore reversed the denial of Unikrn’s motion and directed arbitration.


Hastings v. Unikrn, Inc., 12 Wash. App. 2d 1072 (2020)