A recent decision from the Sixth Circuit addresses when a consumer’s online actions—such as clicking buttons on a website—constitute valid acceptance of contractual terms, including arbitration provisions, under California law. The ruling underscores the importance of website design and disclosure practices in ensuring enforceable online contracts.
Online Contract Formation: The Legal Standard
The court reaffirmed that California law applies traditional contract principles to online transactions. Mutual assent is required, typically shown through an offer and acceptance, and courts focus on the objective manifestations of the parties’ conduct rather than their subjective intent. In the online context, this means that a user’s actions—such as clicking a button after being presented with terms—can signal acceptance, provided the website gives reasonably conspicuous notice of the terms.
Types of Online Contracts
The decision distinguishes among three common types of online contract offers:
- Clickwrap/Scrollwrap: Users must affirmatively click an “I agree” button after being presented with terms. These are generally enforceable.
- Browsewrap: Terms are hyperlinked somewhere on the site, and users are deemed to accept by mere use. These are rarely enforceable due to lack of conspicuous notice.
- Hybrid (Sign-in Wrap): Users are told they accept terms by taking a specific action (e.g., clicking a button), but the terms are presented via hyperlink rather than a pop-up. Enforceability depends on the conspicuousness of the notice and the context.
Fact-Intensive Test for Hybrid Offers
For hybrid offers, courts apply a fact-intensive test to determine whether the website provided “reasonably conspicuous” notice. Key factors include:
- Page Design: Simple, uncluttered pages are favored; clutter can distract users from noticing terms.
- Proximity of Notice: The closer the notice is to the action button, the more likely it is to be conspicuous.
- Font and Color: Larger fonts and colored hyperlinks help draw attention; small, plain text may be insufficient.
- Context of Interaction: If users would reasonably expect a continuing relationship (e.g., ongoing services or communications), courts are more likely to find the terms enforceable.
Application to LowerMyBills.com
In this case, the court found that LowerMyBills.com provided sufficiently conspicuous notice of its Terms of Use—including a mandatory arbitration provision—on pages where users entered personal information and clicked “Calculate” buttons. The notice was placed directly below the action buttons, used a blue hyperlink for the terms, and appeared in a context where users could expect ongoing communications from affiliated lenders. The court held that these design choices met the standard for conspicuousness, and that the user’s clicks constituted valid acceptance of the terms.
Challenge to Substance of Arbitration Clause
The court found that:
- The lack of detail in the arbitration clause (e.g., selection of arbitrator) did not invalidate the agreement, as the Federal Arbitration Act provides gap-filling rules.
- Questions about whether specific claims fall within the scope of the arbitration agreement (“arbitrability”) were delegated to the arbitrator, not the court.
- Arguments about termination of consent or applicability of regulatory rules did not defeat the enforceability of the arbitration agreement, as these issues were also for the arbitrator to decide.
Dahdah v. Rocket Mortg., LLC, No. 24-1910, 2026 U.S. App. LEXIS 1881 (6th Cir. Jan. 26, 2026).
