GOOD AGREEMENT BAD AGREEMENT: Court Finds Factor75’s Webflow Sufficient to Compel Arbitration– but Not As to Hello Fresh

Little known legal fact: the general rule is a parent or subsidiary cannot enforce an arbitration provision in the name of a related entity.

That quirk hung Hello Fresh in a recent effort to enforce an arbitration provision in a TCPA class action– but the ruling is still useful for those looking for guidance on how to draft effective arbitration provisions.

In Shwartz v. Hellofress, et al. 2026 WL 161514 (D. Mass. Jan. 21, 2026) the Court upheld the sufficiency of an arbitration form on a website run by Factor75– a mealkit prep company.

The Plaintiff claimed he did not see the arbitraiton provision but the court still enforced it applying governing law to the effect that a consumer is bound whenever the terms are “reasonably” conspcious and the consumer had the opportunity to review them before accepting terms:

Since the parties agree that Schwartz lacked actual notice of Factor75’s arbitration agreement, 4 the defendants must demonstrate
reasonable notice of the agreement’s terms. Id. at 127. Such reasonable notice may exist “ ‘so long as [Schwartz] had an adequate
opportunity’ ” to review those terms. Id. (quoting Archer v. Grubhub, Inc., 490 Mass. 352, 361 (2022)). A court must analyze
the “totality of the circumstances” to determine whether reasonable notice of the terms of the offer was provided. Id. at 127-28
(quotation marks omitted); Kauders, 486 Mass. at 573. That test involves consideration of (1) “the nature, including the size,
of the transaction,” (2) “the interface by which the terms are being communicated,” (3) “the form of the contract,” and (4)
“whether the notice conveys the full scope of the terms and conditions.” Good, 494 Mass. at 128 (quotation marks omitted);
Kauders, 486 Mass. at 573. Reasonable notice does not exist unless Factor75 notified Schwartz that there are binding terms,
including a mandatory arbitration clause, and Schwartz had an opportunity to review those terms. See Good, 494 Mass. at 128;
Kauders, 486 Mass. at 573

The court determined the notice was sufficient since the hyperlink was highlighted in blue and in close proximity to a submission box:

The words Terms and Conditions sat immediately below the toggle switch that Schwartz
clicked to indicate his agreement to “[r]eceive offers and promotions via text messages” from Factor75. Id. The presence of
the Email Preferences section at the top of the webform would not have distracted a user from noticing the hyperlinked Terms
right below the toggle switch. See Good, 494 Mass. at 131 (“The link to the terms of use was not buried on a cluttered screen or
presented inconspicuously at the tail end of a cumbersome registration and payment process.”). The Terms and Conditions were
underlined, written in blue text, and thus appeared as a hyperlink. ECF 17-1, ¶¶ 3-4; see Good, 494 Mass. at 133 (“ ‘hyperlinks …
are commonly blue and underlined’ ” (quoting Cullinane, 893 F.3d at 63)). The webform also reasonably appeared to be a
contract, as it made clear that “[b]y checking the box above, [Schwartz] agree[d] to Factor’s Terms and Conditions
.” ECF 17-1, ¶ 3. Despite the smaller font, the notice was legible and distinguishable as the only part of the webform to contain blue text
and consist of full sentences. See Cullinane, 893 F.3d at 62 (identifying “contrasting font” as a “general characteristi[c] that
make[s] a term conspicuous”).

Excellent!

One problem though. Although Factor75 was a party permitted to enforce the terms of the arbitration agreement HelloFresh– apparently its parent company– was not listed on the arbitration agreement. So it was not a signiatory to the agreement.

HelloFresh argued it should still be able to enforce the agreement since it only placed calls due to the consumer signing up on the Factor75 website but the court said “nope”– the fact HF might be relying on a formfill on its subsidiary’s website did not make it a party that can enforce the terms of the agreement. The claims against HF did not arise out of the contract– they arose out of alleged violations of federal and state law. So it would not be inequitable to deny HF the right to enforce the contract on an estoppel ground.

This case is similar to the recent case involving Move.com and reminds everyone to make sure the scope of online arbitration agreements tracks with consent– if YOUR company plans to rely on a consent obtained on a DIFFERENT company’s website you need to make sure YOUR company is also listed on the arbitration provision!

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