Ninth Circuit Rules Browsewrap Agreements Can’t Enforce Arbitration
The Ninth Circuit ruled browsewrap agreements don’t show valid consumer assent for arbitration.
Why it matters: This decision sets a precedent for online contract enforceability, requiring companies to provide clear notice and obtain explicit consent for arbitration clauses.
- On Oct. 28, 2026, Ninth Circuit denied Rugs.com’s motion to compel arbitration in Perkins v. Rugs.com.
- Court held that Rugs.com failed to prove consumers unambiguously agreed to arbitration terms in the browsewrap agreement.
- Affirms prior rulings in Berman v. Freedom Financial (2022) and Nguyen v. Barnes & Noble (2014) requiring conspicuous notice and affirmative assent.
- Judge emphasized that a click is not consent unless users clearly understand what they are agreeing to, per attorney James Hannaway.
On October 28, 2026, the U.S. Court of Appeals for the Ninth Circuit issued a memorandum ruling in Perkins et al. v. Rugs.com, LLC, affirming the lower court’s refusal to enforce the arbitration clause contained in Rugs.com's browsewrap Terms of Use.
The court found that Rugs.com failed to demonstrate that consumers had unambiguously manifested assent to the arbitration agreement simply by using the website. The decision stressed that enforceable online arbitration agreements require reasonably conspicuous notice and a user action that clearly indicates their agreement.
This ruling reinforces the Ninth Circuit’s precedent from Berman v. Freedom Financial Network, LLC in 2022, where the court held users must receive conspicuous notice or have actual knowledge of terms to be bound. It also echoes Nguyen v. Barnes & Noble Inc. (2014), which ruled that a mere hyperlink without affirmative action is insufficient consent.
James Hannaway, an attorney at Berger Montague, summarized the impact: “A click doesn’t sign away your rights unless the company tells you that’s what the click means.” This decision signals to online retailers and platforms that clear, affirmative consent is necessary for arbitration clauses to be enforceable.
By the numbers:
- October 28, 2026 — Ninth Circuit decision date in Perkins et al. v. Rugs.com, LLC
- 25-4155 — Ninth Circuit docket number for the case
- 2014 and 2022 — Years of key precedent cases (Nguyen v. Barnes & Noble; Berman v. Freedom Financial) that informed this ruling