SMS Terms and Conditions: Why Text Sign-Up Flows Keep Losing Arbitration Motions

The table lists the rulings. We read the Ninth Circuit opinion in Berman in full. The three district court rulings are known to us through a law firm summary and two TCPAWorld reports, which we opened; we have not read those opinions themselves.

All four arose from claims about telemarketing calls or texts. In each, the company or its lead seller had terms containing an arbitration clause.

A text-message suit is typically filed as a proposed class action. A valid arbitration clause with a class waiver would move the named plaintiff's claim out of court. So the first motion is often a motion to compel arbitration.

That motion puts the sign-up form on trial before anything else. Under the Ninth Circuit's rule, repeated in Chabolla v. ClassPass in 2025, the party seeking arbitration must prove the existence of an agreement by a preponderance of the evidence. The company has to show what the form looked like and what the subscriber did.

Sign-up forms for text programs are built by marketing teams to convert. The fields are short, the button is large and the legal text is small. Those are the features courts have found wanting.

The FCC's rule defines prior express written consent as a written agreement bearing the signature of the person called that clearly authorizes the seller to deliver advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice. The agreement must disclose that the person is not required to sign as a condition of purchase. The rule says a signature includes an electronic form recognized under federal or state law.

That definition is about whether the message may be sent. It says nothing about arbitration. Whether the subscriber also agreed to a separate terms document is a question of state contract law, answered with the notice-and-assent test courts apply to any online agreement.

A form can satisfy one and fail the other. In the LaserAway ruling, as Kilpatrick reports it, the plaintiff had provided her phone number through the questionnaire, and the dispute before the court was only whether clicking the button bound her to the terms. It did not.

The reverse can also happen. A subscriber may be bound by terms accepted at account creation and still have a claim that texts continued after a stop request. Both the Red Robin and LaserAway plaintiffs alleged that texts kept coming after they asked for them to stop.

In Berman, the pages were run by a lead-generation company. Between a large box and a large green continue button sat two lines of tiny gray type saying the visitor understood and agreed to the terms and conditions, which included mandatory arbitration. The links were not in a distinguishing color. The Ninth Circuit held the notice was not reasonably conspicuous and that clicking continue did not unambiguously manifest assent.

The court also dealt with an argument companies still make: that the notice itself mentioned arbitration. It said the question was whether the plaintiffs could be deemed to have assented to any of the terms in the first place.

In Wong v. LaserAway, according to Kilpatrick's summary, the court assumed the notice was probably visible enough. The form failed on the second step. A button labeled get more info could reasonably be read as a request for information before any agreement. The court applied Berman's rule that a click shows assent only if the person is explicitly told that clicking constitutes assent.

Kilpatrick's summary lists the cases the company relied on and says the court distinguished them because in each the interface explicitly tied the click to acceptance of the terms.

The Red Robin ruling is the clearest example. As TCPAWorld reports it, the customer joined a restaurant loyalty program on the company's website in November 2020 and opted in to texts on the same form. The page linked to two documents with similar names: loyalty program terms, which had no arbitration clause, and SMS terms and conditions, which did.

Directly above the submit button, a statement said that by selecting submit the customer attested to having read the terms and conditions. That statement linked only to the loyalty terms. The link to the SMS terms was bright red and visible, yet nothing asked the customer to read or accept that document.

The court treated the flow as browsewrap as far as the SMS terms were concerned and, applying Florida law, found the customer was not on inquiry notice of the arbitration provision. TCPAWorld describes the layout as a two-link trap: a reasonable person would assume that reading the terms they were asked to attest to was enough.

The fix TCPAWorld's author draws is narrow. Where there are several terms documents, the arbitration provision should appear in, or be clearly tied to, every document the customer is asked to accept.

Berman was a lead-generation case. The arbitration clause in the lead company's terms covered disputes about telemarketing calls or texts from the company or its marketing partners. The businesses that used the leads sought to rely on it, and the motion failed with the page.

Gilliam v. Prince Health, a Middle District of Tennessee ruling of 16 April 2025 reported by TCPAWorld, shows a second weakness. The defendant had bought the lead through a chain of two sellers. It offered a visual rendering of the web session showing the plaintiff's details being typed into the form. The plaintiff testified at deposition that he had never visited the site.

As TCPAWorld reports it, the court found the defendant had met its initial burden and still denied the motion, because the sworn denial put formation in dispute. The Federal Arbitration Act provides that when the making of the arbitration agreement is in issue, the court proceeds summarily to trial on that question, with a jury if the opposing party demands one.

A Ninth Circuit memorandum of 4 November 2026 adds a recent example of lead-form design. In a data-breach case, the panel affirmed the denial of arbitration for quote-request forms run by LendingTree and QuoteWizard, pointing to tiny type, cluttered pages and a terms link placed well below the button. The disposition is unpublished and is not precedent.

Many text programs enroll people who send a keyword to a short code, or who write a number on a card at a counter. No web page is involved, and the SMS terms usually reach the subscriber as a link in a confirmation message after enrollment.

The rulings above all concern web forms. The general test they apply, notice of the terms and an act that unambiguously shows assent to them, is stated as the rule for contracts formed on inquiry notice. How a court would apply it to a reply keyword is a question we cannot answer from the sources we opened.

One point from the web cases carries over as a matter of logic. No authority we opened states it. Terms first delivered after the person has enrolled raise the same question as changed terms: what did the person do, after being told, that shows agreement. Counsel should be asked before relying on an arbitration clause delivered that way.

The table pairs each defect from the rulings with a check you can run on a live form. It is a review aid drawn from those rulings. It does not say a form that passes would be enforced, and the rulings come from a small number of courts.

Run the checks on a phone as well as on a desktop. Berman records that one of the two plaintiffs registered on a mobile phone, and the court assessed the page as she saw it.