At the beginning of on-line business-to-consumer commerce, there was an onslaught of cases evaluating whether a site’s terms and conditions were conspicuous enough to bind the user to an arbitration clause.  Those cases have slackened, especially at the Court of Appeals level.  However, the Ninth Circuit revisited the question on Monday. Its comprehensive, citation-rich opinion is must reading for anyone creating a website with hyperlinked terms and conditions or litigating the same.

Online Acquiescence to an Arbitration Provision – In Dahdah v. Rocket Mortgage, LLC, 2026 U.S. App. LEXIS 1881 (9^th Cir. January 26, 2026)(Gibbons, White, Murphy, CJs.), the Sixth Circuit issued an important decision addressing when online “hybrid” or “sign-in wrap” agreements create enforceable contracts to arbitrate under California law, as it reversed a district court’s denial of a motion to compel arbitration and held that the plaintiff had formed a binding agreement by clicking buttons on a mortgage referral website.

Michael Dahdah visited LowerMyBills.com three times between October 2020 and February 2021 seeking mortgage refinancing information. LowerMyBills, which shares a parent company with Rocket Mortgage (“Rocket”), operates a referral service matching consumers with lenders. During each visit, Dahdah proceeded through multiple webpages that collected his personal and property information. On the fourth and fifth pages of the process, immediately below green “Calculate” buttons, small text stated that, by clicking the button above, users would “agree” or “consent” to the hyperlinked Terms of Use, which included a mandatory arbitration provision covering “ALL CLAIMS, DISPUTES OR CONTROVERSIES” with LowerMyBills or its affiliates.

LowerMyBills matched him with Rocket Mortgage’s refinancing options, but, he did not pursue refinancing. However, in June 2022, Rocket allegedly called Dahdah at least eight times despite his number being on the Do Not Call registry.  Dahdah brought a class action against Rocket under the Telephone Consumer Protection Act (TCPA).  In response, Rocket moved to compel arbitration based on the LowerMyBills Terms of Use.

The district court denied the motion to compel, finding that Dahdah and Rocket had not formed a binding contract to arbitrate.  The lower court held that LowerMyBills’ website disclosure was insufficient to create a valid offer under California law. Rocket appealed directly under Section 16 of the Federal Arbitration Act, 9 U.S.C. § 16(a)(1)(A)-(B).

The Sixth Circuit reversed the district court’s order, holding that LowerMyBills and Dahdah had formed a binding arbitration agreement. Writing for a unanimous panel, Judge Murphy applied California contract law principles, opining that, under the Federal Arbitration Act, arbitration agreements are enforceable “save upon such grounds as exist at law or in equity for the revocation of any contract.” Contract formation under California law and the black letter principles we all learned in law school requires mutual assent demonstrated through a valid offer and acceptance, which is judged by an objective standard based on parties’ outward manifestations, rather than their subjective intent.

The court opines that, for online contracts, California law recognizes a spectrum of proposals. At one end, “clickwrap” and “scroll wrap” agreements that require users to click “I agree” after reviewing terms are generally enforceable. At the other end, “browsewrap” agreements that merely post terms on a website with no affirmative action required on the part of the site’s user are typically unenforceable. In between lie “hybrid” or “sign-in wrap” agreements where users must take some action (like clicking a button or creating an account) and the site’s language indicates this action manifests assent to hyperlinked terms.

The court puts LowerMyBill’s site into the hybrid category.  It, then, applies a “fact-intensive,” totality of the circumstances test which focuses on four key factors to determine if such a hybrid offer provides “reasonably conspicuous” notice:[1]

1. Page Design: Was the page “uncluttered” or filled with distracting elements? The court found LowerMyBills used a “simple design,” unlike the cluttered pages rejected in Berman v. Freedom Financial Network, LLC, 30 F. 4^th 849 (9^th Cir. 2022).
2. Proximity to Action Button: Was the offer placed near the button which users must click? The court emphasized that LowerMyBills placed its proposal “directly” “below the action button” on each page, with dynamic scrolling ensuring users always saw the offer on the same screen as the buttons. This resembled Oberstein v. Live Nation Enterprises, Inc., 60 F. 4^th 505 (9^th Cir. 2023), rather than Chabolla v. ClassPass, Inc., 129 F. 4^th 1147 (9^th Cir. 2025), where the offer was placed “on the periphery” below a second button users might not see.
3. Font and Color: Did the design draw attention to the proposal? While LowerMyBills used small font, the court found this comparable to Uber’s approved design, see Meyer v. Uber Techs., Inc., 868 F 3d 66 (2^nd Cir 2017). Critically, the hyperlinked “Terms of Use” appeared in “bright blue font” that contrasted with the white background, unlike the “tiny gray font” rejected in Berman.
4. Nature of Interaction: Would users expect contractual terms? The court concluded that users visiting a mortgage referral service would anticipate “an ongoing relationship” with LowerMyBills and affiliated lenders, not a “one-off transaction.” Users would reasonably expect that a free service comes with “contractual strings attached.”

Having found the link to contract terms sufficiently conspicuous, the court considered the rest of its analysis to be “straightforward.”  LowerMyBills told users they would accept the firm’s contract terms if they clicked the buttons. Dahdah admittedly clicked these buttons, which the court held constituted a “manifestation of assent to the terms” in the manner invited by LowerMyBills. The court rejected Dahdah’s argument that he lacked “actual knowledge” of the offer, emphasizing that California contract law applies an objective standard: if conduct would lead a reasonable person to believe acceptance occurred, the contract is enforceable regardless of subjective intent.

The court also addressed three other arguments. First, it rejected Dahdah’s claim that the arbitration provision was unenforceable due to missing procedural details, such as the designation of an arbitration organization, the number of arbitrators, and their selection method. The court held that the FAA’s gap-filling provisions in 9 U.S.C. § 5 supply such details when agreements, like LowerMyBills’, reference the FAA.

Second, the court held that the agreement clearly delegated “threshold arbitrability questions” – including whether the dispute falls within the arbitration clause’s scope – to the arbitrator rather than the court. The Terms stated that the arbitrator must resolve “the issue of arbitrability” and that “[a]ny controversy concerning whether a dispute is arbitrable shall be determined by the arbitrator and not by the court.” This delegation language required the court to send Dahdah’s argument about the temporal scope of the arbitration clause – whether calls over a year after website visits were covered – to the arbitrator.

Third, the court delegated to the arbitrator Dahdah’s contention that the parties’ agreement terminated after three months based on an FCC order addressing consent under the TCPA. The court held this was another threshold arbitrability question covered by the delegation clause.

In summary, hybrid agreements remain enforceable under California law when properly designed. Companies should ensure that: (1) pages are uncluttered without excessive visual distractions; (2) contractual language appears directly adjacent to the action button users must click; (3) hyperlinked terms use contrasting colors to stand out from surrounding text; and (4) the interaction suggests an ongoing relationship rather than a one-time visit. Nor does small font alone doom website agreements where other design elements draw sufficient attention to the terms; however, the typeface must not be so small as to be “barely legible to the naked eye,” the court’s view of the fatal flaw in Berman.

Finally, clear delegation clauses are critical if counsel wants to assure that threshold questions go to the arbitrator. Explicit language delegating arbitrability questions to the arbitrator, rather than an isolated reference to an institution’s rules, reduces the risk, which is more prevalent in recent case law, that a court might hold that an unsophisticated consumer would not understand that those rules turned jurisdictional questions over to the arbitrator and, therefore, refuse to delegate those questions.

Those of us in the Northeast have finally dug out of the snow; now we only face plunging temperatures.  As they used to say on “Hill Street Blues,” be careful out there.

David A. Reif, FCIArb

Reif ADR

Dreif@reifadr.com

[1] The opinion includes relevant screenshots from websites that were involved in many of the cases which it cites.  Other judges and counsel would do well to follow suit.