Summary. Almost every consumer relationship online is governed by a contract nobody read, and whether that contract exists at all turns on interface design rather than on legal drafting. This article explains how courts decide whether a website or app user agreed to terms: the spectrum from clickwrap through sign-in wrap to browsewrap, the reasonable notice and manifestation of assent standards applied in Specht, Nguyen, Meyer, Berman, and Oberstein, and the specific design features that decide cases. It then covers what those terms can and cannot accomplish: arbitration clauses and class waivers under the Federal Arbitration Act, delegation clauses and who decides arbitrability, the mass arbitration problem that has made these clauses double-edged, forum selection and choice of law, limitations of liability, unilateral modification and the illusory promise problem, and the consumer protection overlay for auto-renewal and cancellation. It closes with an interface and drafting checklist, a worked example, an FAQ, and related reading.

Here is an uncomfortable truth for lawyers: the enforceability of your client's terms of service is decided mostly by a product designer.

Not by the arbitration clause you drafted. Not by the choice of law provision. By whether the sign-up screen put a legible line of text near the button saying that clicking it means agreeing to terms, and whether the hyperlink to those terms looked like a link.

Courts have said this in so many words. The question is not whether the terms are good; it is whether a reasonably prudent user was put on inquiry notice and manifested assent. That is an interface question, and it is answered from a screenshot.

The short answer

Online agreements are ordinary contracts, and formation requires mutual assent. Courts have developed a rough taxonomy:

Type Design Typical outcome
Clickwrap User must click a box or button that says "I agree to the Terms," with a hyperlink Routinely enforced
Sign-in wrap The action button (Sign Up, Continue, Place Order) is accompanied by text stating that proceeding constitutes agreement, with a hyperlink Enforced if notice is conspicuous and the link is obvious; the biggest litigation category
Scrollwrap Terms displayed in a scroll box the user must scroll through before assenting Strongest, and rare outside high-value transactions
Browsewrap Terms linked in a footer; no affirmative action Generally unenforceable against consumers absent actual knowledge

The controlling test in most circuits: whether the website provided reasonably conspicuous notice of the terms, and whether the user took an action that unambiguously manifested assent to them.

Federal law supplies the electronic signature framework: the E-SIGN Act, 15 U.S.C. §§ 7001 to 7031, and state enactments of the Uniform Electronic Transactions Act give electronic records and signatures the same effect as paper ones. These statutes establish that a contract can be electronic; they do not establish that this particular user agreed.

Part I: The formation cases

Specht: the origin

Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002), then-Judge Sotomayor's opinion, is the foundation. Users downloaded a software plug-in by clicking a "Download" button. Terms containing an arbitration clause were on a portion of the page below the button, visible only after scrolling.

The court refused to enforce. "[A] consumer's clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking on the download button would signify assent to those terms." The court also observed that "[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential."

That sentence is the test, and it has been quoted in essentially every subsequent case.

Nguyen: browsewrap fails

Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014), held that a browsewrap agreement, with terms hyperlinked in the site footer and no affirmative assent, was unenforceable. "[W]here a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on, without more, is insufficient to give rise to constructive notice."

The court left open that a browsewrap could bind a user with actual knowledge, which is why sophisticated commercial users and repeat visitors are sometimes treated differently.

Meyer: sign-in wrap succeeds

Meyer v. Uber Technologies, Inc., 868 F.3d 66 (2d Cir. 2017), enforced an arbitration clause where Uber's registration screen displayed, below the "REGISTER" button, the text "By creating an Uber account, you agree to the TERMS OF SERVICE & PRIVACY POLICY," with the terms in blue and underlined.

The court emphasized: the entire screen was visible at once with no scrolling required; the text was in dark print against a white background; the hyperlink was in blue and underlined; and the notice was "spatially coupled" and "temporally coupled" with the action.

Meyer is the template. If your interface looks like Uber's did, you are probably fine. If it does not, ask why.

Berman: what fails

Berman v. Freedom Financial Network, LLC, 30 F.4th 849 (9th Cir. 2022), refused to enforce where notice appeared in "tiny gray font considerably smaller than the font used in the surrounding website elements," and the hyperlink to the terms was not set apart in any way that would alert a user that it was a link.

The court articulated two requirements clearly:

  1. The website must provide reasonably conspicuous notice of the terms, "displayed in a font size and format such that the court can fairly assume that a reasonably prudent Internet user would have seen it."
  2. The user must take an action unambiguously manifesting assent, and "the notice must explicitly notify a user of the legal significance of the action she takes."

Berman also held that a hyperlink must be readily apparent as a hyperlink, conventionally through blue underlined text or a comparable visual cue. Plain black text that happens to be clickable is not enough.

Sgouros: the misleading interface

Sgouros v. TransUnion Corp., 817 F.3d 1029 (7th Cir. 2016), refused enforcement where the page's own text told users that clicking the button authorized a credit report request, without indicating it also meant agreeing to terms. "[N]o court can find that a reasonable person would have known that she was agreeing to a contract's terms when the website's own language told her something different."

The lesson: your interface copy must not contradict the assent notice.

Oberstein: the modern synthesis

Oberstein v. Live Nation Entertainment, Inc., 60 F.4th 505 (9th Cir. 2023), enforced a sign-in wrap where the notice appeared directly above the button, in a legible size, with the terms hyperlinked in blue. The court applied Berman and found both prongs satisfied, and it also enforced the delegation clause so that the arbitrator decided arbitrability.

Oberstein is useful because it shows the Ninth Circuit enforcing after Berman, which had been read too broadly as hostile to sign-in wraps generally. The distinction is design quality, not doctrine.

The design features that actually decide cases

From the case law, in rough order of importance:

  1. Is there affirmative action tied to assent? A button click accompanied by notice, not passive browsing.
  2. Does the notice state the legal significance? "By clicking Continue, you agree to the Terms of Service" beats "See our Terms."
  3. Is the notice visible without scrolling at the moment of the action, on the devices your users actually use? Test mobile separately; most failures are mobile.
  4. Is the notice legible? Comparable font size to surrounding text, adequate contrast. Small gray type is the single most common defect.
  5. Does the hyperlink look like a hyperlink? Blue, underlined, or otherwise visually distinguished.
  6. Is the notice spatially and temporally coupled to the action button?
  7. Does other on-screen text contradict it?
  8. Can you prove what this user saw? Which brings us to the next point.

Proving assent

Winning on the law is useless if you cannot prove the facts. A motion to compel arbitration is supported by a declaration, and it must establish:

  • The version of the interface presented to this user on this date.
  • The version of the terms in effect then.
  • The record of this user's account creation or transaction.
  • Ideally, screenshots or a rendering of the actual flow as of that date.

Companies that redesign their sign-up flow quarterly and keep no archive lose cases they should win. Version your terms, archive your flows, and log assent events (timestamp, IP, user agent, terms version hash). That logging costs almost nothing and is dispositive.

Part II: Arbitration clauses

The Federal Arbitration Act framework

The FAA, 9 U.S.C. §§ 1 to 16, makes written arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." § 2.

That savings clause is the doorway for defenses like unconscionability, but the Supreme Court has held it does not permit rules that single out arbitration or interfere with its fundamental attributes.

  • AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011): the FAA preempts a state rule conditioning enforceability on the availability of classwide arbitration.
  • Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018): class and collective action waivers in employment arbitration agreements are enforceable notwithstanding the National Labor Relations Act.
  • Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022): California's rule barring waiver of representative claims under its Private Attorneys General Act was partly preempted; individual PAGA claims may be compelled to arbitration. The California Supreme Court subsequently held that a plaintiff whose individual claims are compelled retains standing to pursue non-individual PAGA claims in court, so the practical effect is narrower than it first appeared.

The exclusions

Section 1 exempts "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

Delegation clauses: who decides arbitrability?

A clause delegating threshold questions of arbitrability to the arbitrator is itself an agreement subject to the FAA.

Drafting consequence: incorporate arbitration rules that delegate arbitrability (AAA and JAMS rules do), state the delegation expressly, and audit every subsequent terms document (sweepstakes rules, promotion terms, beta agreements) to make sure it does not create a Suski problem.

Procedure

Unconscionability: what still works

State contract defenses survive the savings clause where they apply generally. Recurring successful challenges:

  • Costs that make vindication impracticable (large filing fees imposed on consumers, though most consumer clauses now shift fees to the company precisely to defeat this).
  • Lack of mutuality where only the consumer must arbitrate.
  • Unreasonable limitations period shortening statutory deadlines.
  • Prohibition on statutory remedies, including punitive damages or fee shifting the statute provides.
  • Confidentiality provisions that give the repeat player an informational advantage (results vary by state).
  • Distant forum requirements imposing meaningful cost on individual claimants.
  • Procedural unconscionability through oppressive presentation, which loops back to the interface question.

California applies a sliding scale requiring both procedural and substantive unconscionability, and it remains the most active jurisdiction for these challenges.

The mass arbitration problem

Here is the twist that has changed corporate practice. Class waivers push claims into individual arbitration. Plaintiffs' firms responded by filing thousands of individual arbitration demands at once, each triggering a per-case administrative fee payable by the company under provider rules. Ten thousand demands can generate filing fees in the tens of millions of dollars before a single merits decision.

Companies have responded with batching provisions, bellwether procedures, mandatory informal dispute resolution periods, and negotiated fee arrangements with providers. Courts have divided on whether such provisions are enforceable, with some finding them unconscionable and others upholding them.

Practical advice: if you use a class waiver, address mass arbitration expressly and thoughtfully, in a way that provides a genuine path to resolution rather than an obstacle course. Provisions that read as pure attrition attract unconscionability findings. And model the actual exposure before choosing arbitration; for some businesses, litigation with a class waiver in court is now the better bet.

See Arbitration, Mediation, and Choosing a Dispute Resolution Forum and The Intricacies of AAA Commercial Arbitration.

Part III: The rest of the terms

Unilateral modification

Nearly every terms document says the company may change the terms at any time by posting a revised version. Courts have treated that with skepticism.

Douglas v. U.S. District Court, 495 F.3d 1062 (9th Cir. 2007), held that a service provider could not bind a customer to modified terms posted on a website the customer had no reason to visit. "Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side."

A related problem is the illusory promise: if one party may change the agreement at will, including retroactively, some courts hold there was no consideration and the entire agreement, including the arbitration clause, fails.

How to modify defensibly:

  • Provide advance notice through a channel the user actually uses (email, in-app notification), not a silent posting.
  • Require affirmative assent for material changes, ideally through a re-acceptance flow.
  • Apply changes prospectively, and say so.
  • Limit the modification right: no retroactive changes, no changes to the dispute resolution provision without notice and an opt-out period.
  • Log the notice and the acceptance.

Forum selection and choice of law

A forum selection clause is generally enforceable in consumer contracts, Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991), and is implemented through 28 U.S.C. § 1404(a) transfer rather than a Rule 12(b)(3) motion when it points to another federal district. Atlantic Marine Construction Co. v. U.S. District Court, 571 U.S. 49 (2013). Atlantic Marine also directs that a valid clause should control "except in the most unusual cases," that the plaintiff's choice of forum receives no weight, and that private-interest factors are deemed to favor the contractual forum.

Choice of law clauses are generally enforced where the chosen state has a substantial relationship to the parties or the transaction and the choice does not contravene a fundamental policy of a state with a materially greater interest. Restatement (Second) of Conflict of Laws § 187.

Note the interaction with arbitration. If you have an arbitration clause, the forum selection clause governs only claims outside it, and inconsistency between the two invites Suski litigation. Draft them together.

See Personal Jurisdiction Over Online and Foreign Defendants.

Limitations of liability and warranty disclaimers

Standard, and generally enforceable between businesses. In consumer contracts, watch for:

  • UCC § 2-316 requirements for disclaiming implied warranties: mention of merchantability, conspicuousness, and, for "as is," conventional language.
  • UCC § 2-719(3): limitation of consequential damages for personal injury in consumer goods is prima facie unconscionable.
  • Magnuson-Moss Warranty Act restrictions on disclaiming implied warranties where a written warranty is given.
  • State consumer protection statutes that void certain exculpatory terms.

For the substantive drafting, see Indemnification and Limitation of Liability.

License grants and user content

Terms for any platform hosting user submissions need a license grant broad enough to operate the service (host, reproduce, display, distribute, create derivative works for formatting and moderation, sublicense to CDNs and subprocessors) and no broader.

Overbroad grants generate public backlash reliably, and the pattern repeats every few years: a company adds "perpetual, irrevocable, worldwide license to use your content for any purpose," users read it, and the company retracts within 72 hours. Draft the grant to the actual operational need and explain it in plain language.

Also address: representations that the user has rights to the content, a takedown mechanism, and interaction with the DMCA safe harbor. See Digital Millennium Copyright Act Safe Harbors for Online Service Providers.

Acceptable use, scraping, and API terms

Terms are the primary legal control over automated access. Contract claims for violating access restrictions survive independently of computer fraud claims, and after the narrowing of the federal computer fraud statute they carry more weight than they used to. See Data Scraping After hiQ v. LinkedIn.

Practical drafting: prohibit automated access except through documented APIs, state that the prohibition is a condition on the license to access rather than a mere covenant, provide a technical enforcement mechanism, and preserve the right to revoke access.

Auto-renewal and cancellation

This is now a leading source of regulatory and class exposure.

  • The federal Restore Online Shoppers' Confidence Act, 15 U.S.C. §§ 8401 to 8405, requires clear disclosure of material terms before obtaining billing information, express informed consent, and a simple mechanism to stop recurring charges.
  • The FTC's Negative Option Rule, often called the click-to-cancel rule, was adopted in 2024 to require cancellation as easy as sign-up, and was vacated by the Eighth Circuit in 2025 on procedural grounds. The underlying ROSCA obligations and Section 5 authority remain, and the FTC has continued to bring enforcement actions. Do not treat the vacatur as deregulation.
  • State auto-renewal laws, most prominently California's, Cal. Bus. & Prof. Code § 17600 et seq., impose specific disclosure, consent, acknowledgment, and cancellation requirements, and several provide remedies.

Design implication: if a user can subscribe in two clicks online, they should be able to cancel in about the same number of clicks online. Requiring a phone call to cancel a subscription sold online is the single most enforcement-attractive design pattern in consumer commerce.

Dark patterns

Several privacy statutes and the California Privacy Protection Agency's regulations define and prohibit dark patterns, and the FTC has brought Section 5 cases. The recurring problems: asymmetric choice architecture (a large "Accept" and a buried "Manage settings"), pre-checked boxes, confirmshaming, obstruction of cancellation, and misleading interface hierarchy.

The design rule that avoids most of it: make the reject path as easy as the accept path, at the same level, with equal prominence. See State Consumer Privacy Laws.

Part IV: Interface and drafting checklist

Formation (the part that decides enforceability)

  • Affirmative action required: a click on a button or checkbox.
  • Notice text states the legal consequence: "By clicking X, you agree to the Terms of Service and Privacy Policy."
  • Notice is immediately adjacent to the action button, visible without scrolling.
  • Font size comparable to surrounding text; sufficient contrast (no small gray on white).
  • Hyperlinks visually distinct (blue, underlined, or equivalent).
  • No other on-screen text contradicting the assent notice.
  • Tested on the smallest supported mobile viewport, in both orientations.
  • Tested with common accessibility settings and screen readers.
  • Assent events logged: user ID, timestamp, IP, user agent, terms version identifier.
  • Terms versioned and archived; sign-up flow screenshots archived on every material change.

Dispute resolution

  • Arbitration clause with an express delegation provision, or a deliberate decision not to arbitrate.
  • Class and collective action waiver.
  • Mass arbitration procedures that are genuinely workable.
  • Informal dispute resolution period with realistic requirements.
  • Fee allocation that survives unconscionability review.
  • Opt-out right (30 days) if you want to strengthen enforceability.
  • Consistency audit across every other terms document (promotions, sweepstakes, beta, API).
  • Forum selection and choice of law drafted to fit around the arbitration clause.

Substance

  • Scope of license to the user, and revocation rights.
  • User content license limited to operational need.
  • Warranty disclaimers conspicuous and UCC-compliant.
  • Limitation of liability with carve-outs and a stated cap.
  • Indemnity from the user, scoped realistically.
  • Acceptable use, automated access, and API terms drafted as conditions.
  • Termination and suspension rights, with data return or deletion.
  • Modification procedure with notice and prospective effect.
  • Severability and survival.
  • Auto-renewal disclosures and a self-service cancellation path.
  • Accessibility of the terms themselves. See Website and Mobile App Accessibility Under the ADA.

Part III-A: Accessibility, minors, and international users

Three constituencies complicate the formation analysis, and each has its own rules.

Users with disabilities. A notice that is legible to a sighted user may not exist at all for a screen reader user. If the assent text is rendered as an image, is not programmatically associated with the button, or is skipped in the focus order, the "reasonably conspicuous notice" premise fails for that user, and courts have begun to notice. There is also an independent accessibility obligation. Build the assent notice as real text, associate it with the control, verify with a screen reader, and treat the terms document itself as content that must be navigable. See Website and Mobile App Accessibility Under the ADA.

Minors. A contract with a minor is generally voidable by the minor, and the infancy doctrine has been asserted against arbitration clauses and liability waivers with mixed results, depending on whether the minor retained the benefits and on state-specific disaffirmance rules. Separately, COPPA governs services directed to children under 13, requiring verifiable parental consent for the collection of personal information, and several states have enacted age-appropriate design and parental-consent requirements for older minors, some of which have been challenged on First Amendment grounds. If your service can be used by minors, the terms are the least of the analysis; the design obligations come first.

International users. A single terms document rarely works globally:

  • The EU treats many standard consumer terms as presumptively unfair under the Unfair Contract Terms Directive, restricts choice of law and forum clauses against consumers (a consumer generally retains the protection of the mandatory rules of their habitual residence and may sue at home), and treats broad liability exclusions with hostility.
  • The UK, Australia, Canada, and others have consumer guarantees that cannot be excluded by contract.
  • Arbitration clauses and class waivers enforceable in the United States are frequently unenforceable against consumers elsewhere.
  • Data protection terms belong in a separate document with its own required content.

The practical structure most mature companies converge on: a single global terms document with a jurisdiction-specific supplement that overrides for named regions, a separate privacy policy, and a separate data processing addendum for business customers. Trying to write one clause that satisfies every jurisdiction produces a clause that satisfies none, and a conflicting supplement without an ordering-of-precedence provision produces litigation about which document governs. Say which one wins.

A worked example

Cove Reader, Inc. (fictional) launches a subscription e-reading app. Its sign-up flow: a form with email and password, a large blue "Create Account" button, and, in 9-point light gray text below the button, "By continuing you accept our terms and privacy policy," where "terms" and "privacy policy" are the same gray as the surrounding text but clickable.

Six months later a user files a putative class action over an auto-renewal charge. Cove moves to compel arbitration.

What happens. Under Berman, Cove has a real problem on both prongs. The font is smaller and lighter than the surrounding text, so notice is not reasonably conspicuous. The hyperlinks do not look like hyperlinks. The court may well find no contract was formed at all, which means the arbitration clause, the class waiver, the limitation of liability, and the forum selection clause all fail together.

The fix, before launch, would have taken an hour:

  • Move the notice above the button and increase to the same size as the form labels.
  • Use standard dark text with the links in blue and underlined.
  • Change the wording to "By clicking Create Account, you agree to our Terms of Service and Privacy Policy."
  • Log the terms version and assent timestamp.
  • Archive a screenshot of the flow with each release.

The auto-renewal issue is separate and independent. Cove must disclose the renewal terms clearly before collecting payment information, obtain affirmative consent to the renewal specifically, send an acknowledgment, and provide an online cancellation path. A cancellation flow requiring an email to support will draw regulatory attention regardless of what the terms say.

The deeper lesson. Cove's lawyers wrote a good terms document. It was defeated by a styling decision made by someone optimizing conversion rates, who reasonably assumed that smaller, lighter legal text was better for the funnel. Nobody asked a lawyer to look at the screen.

The process fix: put terms-presentation review into the release checklist, the same way accessibility and analytics review are. It takes ten minutes per release and it protects every substantive provision in the agreement.

Frequently asked questions

Do users have to read the terms for them to be enforceable? No. The requirement is reasonable notice plus manifestation of assent, not actual reading. But if the notice was not reasonably conspicuous, courts will not impute knowledge.

Is a browsewrap ever enforceable? Rarely against consumers. It may bind a party with actual knowledge, and courts have been somewhat more receptive in sophisticated commercial settings or against repeat users with a course of dealing. Do not build a business on it.

Do we need a checkbox? Not necessarily. A well-designed sign-in wrap (notice adjacent to the action button, legible, with obvious links) is routinely enforced. A checkbox is stronger and costs one conversion percentage point that most companies overestimate.

Can we change the terms whenever we want? You can reserve the right, but courts limit it. Give advance notice through a channel users see, apply changes prospectively, and require re-acceptance for material changes, especially changes to dispute resolution.

Are arbitration clauses still worth it? It depends on your exposure profile. They remain the most effective way to avoid class actions. They also expose you to mass arbitration. Model both before deciding, and if you arbitrate, address mass filings in the clause thoughtfully.

What is a delegation clause and do we need one? A provision assigning threshold arbitrability questions to the arbitrator. It is enforceable if clear and unmistakable, Rent-A-Center and Henry Schein, and it keeps early skirmishes out of court. Include it, and make sure your other agreements do not contradict it.

Can we require users to sue us only in our home state? Generally yes with a valid forum selection clause, subject to unconscionability review and to statutes in some states restricting such clauses in consumer contracts. Atlantic Marine makes enforcement straightforward in federal court.

Do we have to let people cancel online? Under ROSCA and state auto-renewal statutes, you must provide a simple mechanism to stop recurring charges. The FTC's more specific click-to-cancel rule was vacated on procedural grounds in 2025, but the statutory obligations and Section 5 authority remain, and several state laws are explicit. Build the online cancellation path.

What about terms for a business-to-business SaaS product? Formation standards are similar but courts are more willing to find assent by sophisticated parties, and negotiated agreements displace the click-through entirely. The substantive terms (SLAs, data protection, liability caps, IP) matter far more. See Drafting Software License Agreements.

How long should the terms be? Long enough to cover the risks, short enough that someone might read them. Plain-language summaries at the top of each section improve both readability and the record on conspicuousness, and they cost nothing legally.

Closing thought

The best terms of service I have seen share three qualities, and none of them is legal sophistication.

They are presented honestly: the assent notice is legible, adjacent to the button, and says what clicking means. They are written to be read, with plain headings and short paragraphs, which turns out to help enforceability as well as trust. And they are operationally true: the license grant matches what the product does, the cancellation clause matches what the interface allows, and the privacy terms match what the tags actually send.

The worst ones are legally maximal and operationally fictional. They claim perpetual worldwide rights the company will never use, disclaim liabilities the law will not let them disclaim, and describe a cancellation process that does not exist. Those documents fail in exactly the moment they are needed, because a court reading them alongside the interface sees a company that was not being straight with its users.

Design the screen first. Then write the terms it actually supports.

Related articles

This article is provided for general informational purposes and does not constitute legal advice. Enforceability of online agreements is highly fact-specific and depends on the interface presented to the particular user. Consult qualified counsel about any particular terms document or dispute.