763 F.3d 1171 (2014)
Barnes & Noble is a national bookseller that owns and operates hundreds of bookstores as well as the website www.barnesandnoble.com.1
In August 2011, Barnes & Noble, along with other retailers across the country, liquidated its inventory of discontinued Hewlett-Packard Touchpads by advertising a fire sale of Touchpads at a heavily discounted price.2 Acting quickly on the nationwide liquidation of Touchpads, Nguyen purchased two units on Barnes & Noble’s website on August 21, 2011, and received an email confirming the transaction.3 The following day, Nguyen received another email informing him that his order had been cancelled due to unexpectedly high demand.4
In April 2012, Nguyen filed this lawsuit in California Superior Court on behalf of himself and a putative class of consumers whose Touchpad orders had been cancelled, alleging that Barnes & Noble had engaged in deceptive business practices and false advertising in violation of both California and New York law.5 Barnes & Noble removed the action to federal court and moved to compel arbitration under the Federal Arbitration Act, arguing that Nguyen was bound by the arbitration agreement in the website’s Terms of Use.6
The website’s Terms of Use are available via a Terms of Use hyperlink located in the bottom left-hand corner of every page on the Barnes & Noble website, which appears alongside other hyperlinks labeled NOOK Store Terms, Copyright, and Privacy Policy.7 These hyperlinks also appear underlined and set in green typeface in the lower left-hand corner of every page in the online checkout process.8 Nguyen neither clicked on the Terms of Use hyperlink nor actually read the Terms of Use.9 Had he clicked on the hyperlink, he would have been taken to a page containing the full text of Barnes & Noble’s Terms of Use, which state, in relevant part: By visiting any area in the Barnes & Noble.com Site, creating an account, or making a purchase via the Barnes & Noble.com Site a User is deemed to have accepted the Terms of Use.10
The district court denied Barnes & Noble’s motion to compel arbitration and to stay proceedings.11 Barnes & Noble appealed the denial to the United States Court of Appeals for the Ninth Circuit, which heard argument on May 16, 2014.12
Whether Nguyen entered into an agreement with Barnes & Noble to arbitrate his claims by using the website?13
Under New York law, mutual manifestation of assent is the touchstone of contract formation.14 Browsewrap agreements are enforceable only when the user has actual or constructive notice of the terms such that a reasonably prudent user would be on inquiry notice based on the website design, content, and placement of the hyperlink.15
No. The underlying facts establish that Nguyen purchased two Touchpads on August 21, 2011, received a cancellation email the next day, and filed suit in April 2012 alleging deceptive practices under California and New York law.16 Barnes & Noble moved to compel arbitration under the FAA based on the browsewrap Terms of Use. Nguyen never clicked the Terms of Use hyperlink located in the bottom left-hand corner of every page and never read the Terms of Use.17 Because no affirmative action was required and the site provided no explicit textual notice that continued use would bind the user to the terms, Nguyen lacked the requisite notice for contract formation.18
Nguyen did not enter into an agreement with Barnes & Noble to arbitrate his claims.19
Whether the placement of the Terms of Use hyperlink on the website provided sufficient notice to bind Nguyen to the arbitration provision?20
The conspicuousness and placement of the hyperlink, other notices given to users, and the website's general design all contribute to whether a reasonably prudent user would have inquiry notice of a browsewrap agreement.21 Close proximity alone, without more, is insufficient when the site provides no notice to users and prompts no affirmative action to demonstrate assent.22
No. Although the hyperlink appeared in underlined green text in the bottom left-hand corner of every page, including checkout screens alongside links such as NOOK Store Terms and Privacy Policy, the website otherwise provided no notice to users nor prompted them to take any affirmative action to demonstrate assent.2324 The district court denied the motion to compel.25 The Ninth Circuit affirmed after reviewing de novo, holding that even close proximity of the hyperlink to relevant buttons without more is insufficient to give rise to constructive notice under New York law.26
The placement of the Terms of Use hyperlink on the website did not provide sufficient notice to bind Nguyen to the arbitration provision.27
Whether Nguyen is equitably estopped from avoiding arbitration by relying on the Terms of Use’s choice of law provision?28
Equitable estoppel to compel arbitration applies when a non-signatory knowingly exploits the benefits of the agreement and receives benefits flowing directly from the agreement.29 Equitable estoppel typically applies to third parties who benefit from an agreement made between two primary parties.30 Reliance on a choice of law provision alone does not constitute a direct benefit when the provision was chosen unilaterally and any benefit is merely incidental.31
No. Barnes & Noble argued that Nguyen ratified the Terms of Use by relying on its New York choice of law provision in his complaint and asserting class claims under New York law.3233 The Ninth Circuit reviewed for abuse of discretion and rejected the argument because Nguyen is not a third-party beneficiary to the Terms of Use.34 The choice of New York law was made unilaterally by Barnes & Noble, rendering any benefit incidental rather than direct.35 The district court therefore did not abuse its discretion in rejecting the estoppel argument.36
Nguyen is not equitably estopped from avoiding arbitration by relying on the Terms of Use’s choice of law provision.37