You probably clicked “I agree” — but did you really?

Big  companies seem to love online arbitration clauses, but courts (and providers) don’t always love them

If you spend time online, chances are you’ve already “agreed” to arbitrate any dispute with a retailer, app, or platform. You often do that by tapping a button that says, “Create account,” “Place order,” or “Continue.” But the law doesn’t treat every click the same. Whether that buried arbitration clause is enforceable often turns on two questions:

1. Did the site give you reasonably conspicuous notice of the terms, and did you unambiguously manifest assent?

2. Are the procedures so one‑sided or confusing that a court—or even the arbitration provider—refuses to go along?

Why companies push arbitration clauses and why they’re tempted to write their own rules

 Courts – especially the United States Supreme Court – have embraced arbitration based on the federal policy embodied in the Federal Arbitration Act (FAA). [1]  This has encouraged large companies to move disputes into arbitration, often under terms they draft themselves. For lawyers at big companies, it may be tempting to not only require arbitration but to design the arbitration process to favor the company as to location, rules, cost‑sharing, limitation of discovery, class waiver, and provider‑selection mechanics.

1) How you click matters

“Browse‑wrap agreements” have a link at the bottom, but don’t require a user to click on them. They often fail. For example, in Nguyen v. Barnes & Noble [2], the Ninth Circuit held that simply placing a “Terms of Use” hyperlink at the bottom of the page didn’t give users constructive notice. If they didn’t know about it, they couldn’t assent, so there was no agreement, and therefore no arbitration.

But clean “clickwrap” can  work. In Meyer v. Uber Technologies, Inc. [3],  for example, the Second Circuit enforced Uber’s in‑app clause because the screen clearly told users that creating an account meant agreeing to Terms (hyperlinked), and the overall design made that notice reasonably conspicuous.

Mushy “sign‑in‑wrap” probably won’t work. In Berman v. Freedom Financial Network, LLC [4], the Ninth Circuit refused to compel arbitration where the page design and wording didn’t clearly tell users that clicking “Continue” meant agreeing to hyperlinked terms; the notice was not conspicuous enough.

In short, Courts often apply the same formation test: (i) conspicuous notice of terms (visual design, proximity to the button, clear language, hyperlink treatment), and (ii) a user action that clearly signals agreement.

Still, the cases turn on the specific facts of each case and the particulars of the interface and clause.  And you can’t always be sure.  Remember the Meyer, noted above, where the Ninth Circuit found a click-wrap agreement worked?  In another Uber case, Kauders v. Uber Technologies, Inc.[5],  the Massachusetts Supreme Court held an Uber click-wrap interface didn’t pass muster.  Details about appearance, prominence, and clear indication of assent matter.

2) When the content of the “agreement” is too one‑sided

Even if formation is solid, a court can still refuse arbitration if the procedures are substantively unconscionable, that is, overly harsh, confusing, or unfair.

 Heckman v. Live Nation Entertainment, Inc. [6] provides an example. There the Ninth Circuit held Ticketmaster’s clause that routed disputes to New Era ADR’s mass arbitration rules was unconscionable. The panel flagged multiple features as unfair, including mass protocol effects, cramped procedures, limited discovery, limited appeal, and arbitrator‑selection mechanics. The clause was unenforceable, so arbitration was not required. Off to court everyone went.

Then there is the complication caused by companies having to pay fees when thousands of customers file individually where clauses forbid class actions. In Wallrich v. Samsung Electronics America, Inc., the Seventh Circuit held that consumers couldn’t force the company to pay administrative fees for multi‑thousand‑consumer AAA arbitrations. If fees aren’t paid, AAA can close the files and the dispute heads to court.

In short, courts will scrutinize how the arbitration will run. And the practical mechanics make a difference: how discovery is handled, how the arbitrator is selected, how fees are assigned, and the like. And novel, dense, or defense‑skewed “mass” procedures can trigger unconscionability findings.

3) The institutional gatekeepers: AAA and JAMS

Even before a judge weighs in, major providers apply fairness screens.

The AAA reviews consumer clauses for compliance with its Consumer Due Process Protocol and Consumer Arbitration Rules. [7]  AAA may decline to administer cases if the clause materially violates the Protocol or the Rules, including non‑payment of fees or refusal to waive offending provisions.

JAMS Minimum Standards of Procedural Fairness provide that JAMS will administer mandatory pre‑dispute consumer arbitrations only if the contract satisfies its Minimum Standards, requiring reasonable costs, fair location, adequate discovery, and fair neutral selection.  [8] If a clause doesn’t meet those minimums, JAMS won’t administer the case unless the business waives the offending term.

So, a company can draft a clause and get assent, but if the arbitration provider refuses to administer because the terms are too biased or the practical enforcement is impossible, then the clause might not be enforced, thus forcing the dispute into court.

And so . . .

If you do things online, you’ve probably “agreed” to arbitrate. But enforcement isn’t automatic. Courts still insist on meaningful agreement, including clear notice and clear assent.  And they will police one‑sided procedures.

Meanwhile, AAA and JAMS decline cases or clauses that don’t meet their fairness baselines.

How the click is presented and how the arbitration is structured often decide whether the clause sticks.

Footnote

1.        Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006); Southland Corp. v. Keating, 465 U.S. 1 (1984)

2.       Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014)

3.       Meyer v. Uber Technologies, Inc., 868 F.3d 66 (2d Cir. 2017)

4.       Berman v. Freedom Financial Network, LLC, 30 F.4th 849 (9th Cir. 2022)

5.       Kauders v. Uber Technologies, Inc., 159 N.E. 2d 1033 (Mass. 2021)

6.       Heckman v. Live Nation Entertainment, Inc., No. 23‑55770 (9th Cir. Oct. 28 2024)

7.       Wallrich v. Samsung Electronics America, Inc., 106 F.4th 609 (7th Cir. 2024)

8.       AAA Consumer Due Process Protocol

9.       JAMS Minimum Standards of Procedural Fairness