## Facts

- Several consumers bought Dell computers through Dell’s website in 2000–2001 and later sued in a putative class action alleging Dell misrepresented Pentium 4 performance in advertising.
- The online ordering process required completion of five web pages; each page displayed a conspicuous blue hyperlink labeled “Terms and Conditions of Sale.”
- On the final three order pages, the site stated that all sales were subject to Dell’s Terms and Conditions of Sale.
- The Terms and Conditions contained a binding arbitration provision.
- Dell also provided the same terms with the shipment (including on invoices and as separate documents) and made them available by toll-free request.
- Dell’s shipment materials included a 30-day return policy allowing a full refund or credit; plaintiffs kept the computers beyond the return period.
- Dell moved to compel arbitration; the trial court denied the motion, finding no assent to the arbitration clause and, alternatively, that the clause was procedurally and substantively unconscionable.
- Dell took an interlocutory appeal from the order denying arbitration.

## Issues

1. Whether Dell’s hyperlinked Terms and Conditions of Sale, including the arbitration clause, became part of the parties’ contract formed through the online purchase process.
2. If the arbitration clause was part of the contract, whether it was unenforceable due to procedural and/or substantive unconscionability.

## Decision

- The appellate court reversed the denial of Dell’s motion to compel arbitration and remanded.
- The court held the Terms and Conditions (including arbitration) were incorporated into the sales contracts because purchasers had reasonable notice and an opportunity to review the terms via conspicuous hyperlinks and repeated “subject to” statements during checkout.
- The court held the arbitration clause was not procedurally unconscionable because the clause was not hidden, purchasers were directed to the terms, and failure to read accessible terms did not establish unfairness.
- The court held the clause was not substantively unconscionable because plaintiffs did not present sufficient evidence that arbitration costs or procedures were prohibitive or effectively denied a remedy.

## Legal Principles

- Contract terms may be incorporated by reference in an online transaction when the reference is conspicuous and the incorporated terms are readily accessible to the purchaser before completing the transaction.
- A purchaser who proceeds with a transaction after receiving reasonable notice that it is subject to additional terms may be bound by those terms even without an “I agree” click, where the terms are available for review.
- Procedural unconscionability requires more than a party’s failure to read accessible terms; it generally turns on surprise, concealment, deception, or lack of meaningful choice.
- Substantive unconscionability requires proof that terms are so one-sided or burdensome that they effectively foreclose relief; allegations of excessive arbitration fees require concrete evidentiary support.

## Conclusion

The court enforced Dell’s arbitration clause, concluding that conspicuous hyperlinks and repeated notices during checkout incorporated the Terms and Conditions into the contract and that plaintiffs failed to prove procedural or substantive unconscionability.


Hubbert v. Dell Corp., 835 N.E.2d 113 (Ill. App. Ct. 5th Dist. 2005)