Companies spend hours drafting their Terms of Use.  They debate whether to include mandatory, pre-dispute notification provisions; forum-selection clauses; choice-of-law provisions; class-action waivers; and, often most importantly, arbitration terms.  The Terms of Use are intended to be the contract between site users and the site operator, governing the users’ interactions with the site and, at times, any disputes that arise therefrom. 

But while companies agonize over what provisions to include in the Terms of Use, very few ever actually consider the threshold question: has the user assented to the Terms of Use in an enforceable manner? 

California courts have developed four types of online contracts, each defined by the manner in which they are agreed to:

1. Browsewrap Agreement: an agreement “in which an internet user accepts a website's terms of use merely by browsing the site.”[1] 

2. Sign-in-Wrap Agreement: an agreement “in which a user signs up to use an internet product or service, and the sign-up screen states that acceptance of a separate agreement is required before the user can access the service. While a link to the separate agreement is provided, users are not required to indicate that they have read the agreement's terms before signing up.”[2] 

3. Clickwrap Agreement: an agreement “in which an internet user accepts a website's terms of use by clicking an ‘I agree’ or ‘I accept’ button, with a link to the agreement readily available.”[3] 

4. Scrollwrap Agreement: an agreement “like a ‘clickwrap,’ but the user is presented with the entire agreement and must physically scroll to the bottom of it to find the ‘I agree’ or ‘I accept’ button.”[4] 

Regardless of the type of online agreement used, two things must be present for the agreement to be enforceable: (1) notice and (2) manifestation of assent.[5]  For this reason, browsewrap agreements are the least likely to be enforced by courts; they provide the least amount of notice and require no affirmative act of assent. In fact, in his concurring opinion in Berman v. Freedom Fin. Network, LLC, Judge Baker stated that “Long and Sellers teach that, pending further word from the California appellate courts, browsewrap agreements are unenforceable per se.”[6] 

As notice and manifestation of assent increases, the likelihood of enforceability increases. Sign-in-wrap agreements notify users that the Terms of Use apply but require no independent act of acceptance (i.e., clicking a check box).  Clickwrap agreements provide notice and require an independent act of acceptance but do not ensure that the user has actually viewed the Terms of Use before agreeing.  Scrollwrap agreements do all three: (1) put the user on notice, (2) require an independent act of assent, and (2) require that the user at least scroll through the Terms of Use. 

Despite this well-known sliding-scale of enforceability, the majority of websites still rely on browsewrap agreements for their Terms of Use.  They link to the Terms of Use in the footer of the site and state in the Terms of Use themselves that “continued use of the site manifests assent.”  The reason for this is simple: companies do not want to do anything that increases friction on the site, and sign-in-wrap, clickwrap, and scrollwrap agreements increase friction. 

Ordinarily, an unenforceable Terms of Use is nothing to lose sleep over.  Afterall, how important is it to have an enforceable agreement with site users with whom the company has no real relationship?  If you are ChatGPT, pretty important. 

On May 5, 2026, a plaintiff filed a putative class action against OpenAI Global, LLC, claiming that OpenAI violated the Electronic Communications Privacy Act, Section 631 (wiretapping) of the California Invasion of Privacy Act (“CIPA”), and Section 632 (unlawful recording) of CIPA by allowing third parties to surreptitiously collect the searches users entered into ChatGPT.  Plaintiff estimates that “there are millions of individuals in the class.” At $5,000 in statutory damages per violation, the exposure could be astronomical. 

As one might expect, ChatGPT’s Terms of Use include an arbitration agreement with a class action waiver.  That arbitration agreement mandates that users contact ChatGPT before initiating any legal action, includes mass arbitration terms, and even selects an arbitration panel designed to handle mass arbitrations.  Clearly, ChatGPT put a lot of thought into what to include in the Terms of Use.  But the threshold question still remains: are the Terms of Use enforceable?

ChatGPT has implemented a variation on the sign-in-wrap agreement.  At the bottom of ChatGPT’s homepage, it states: “By messaging ChatGPT, an AI chatbot, you agree to our Terms and have read our Privacy Policy.” The word “Terms” is underlined to indicate a hyperlink, and any user who clicks on the hyperlink is routed directly to the applicable provisions. It is a classic sign-in-wrap agreement with one, potentially dispositive difference: the disclaimer is not located in the footer of the webpage.  In practice, therefore, the user could enter his message and click submit without ever reading (or even scrolling over) the disclaimer.  Notice of the disclaimer is, in effect, the same as notice of the Terms of Use in a browsewrap agreement, and, as noted above, courts are hesitant to find that browsewrap agreements provide any notice, let alone the notice necessary to from an enforceable agreement. 

At this point in the case, there is no way to know whether the plaintiff’s claims have any merit. There is also no way to know whether a court will enforce ChatGPT’s Terms of Use.  But it is clear that whether the Terms of Use are enforceable will determine whether this case proceeds as a million-person class action or on an individual basis in a confidential arbitration. And that difference is something someone might lose sleep over.