What Is an Electronic Contract? The Six Kinds, and Which Ones Bind You
You have probably entered into several electronic contracts this week without noticing. Some of them were deliberate, like signing a document somebody sent for signature. Most were not: a check box at checkout, a Continue button on a signup screen, a set of terms you scrolled past on your phone. All of them are electronic contracts. They do not all hold up the same way, and the difference has almost nothing to do with the technology.
This is general information about US electronic contracting rather than legal advice. Contract formation is governed by state law, the appellate decisions discussed below bind only their own circuits, and whether any particular agreement is enforceable turns on the specific facts and the specific screen. For anything that matters, a lawyer licensed in your state is the right person to ask.
What is an electronic contract?
An electronic contract is an agreement made in electronic form rather than on paper. That is the whole definition, and it is broad enough to be almost unhelpful on its own, which is why the useful question is which kind you are dealing with.
It is not a special category of contract. The ordinary requirements still apply, being offer, acceptance, consideration, capacity and a lawful purpose, and both federal and state law provide that a record or signature cannot be denied legal effect solely because it is electronic. A narrow set of document types is carved out of that federal rule, including wills, most family law matters, court filings and several notice types. Six forms account for nearly all the rest.
- Signed on a platform. A document sent for electronic signature, with an audit trail and a certificate of completion.
- Scrollwrap. The terms are put in front of you and the agree button only becomes active once you have scrolled through them.
- Clickwrap. A check box or an I agree button placed next to a link to the terms.
- Sign-in wrap. A Register or Place order button, with text nearby saying that clicking it means you accept the terms.
- An email exchange. Terms agreed back and forth in writing, with no platform involved at all.
- Browsewrap. Terms sitting behind a link somewhere on the page, with nothing asking you to agree to anything.
Six formation methods, and how differently they hold up. The law is the same for all of them. The evidence of agreement is not.
The table is the argument of this whole piece. Every row is an electronic contract. What separates the top from the bottom is not the format, it is how unambiguously the person agreed and how much evidence of that agreement exists afterwards.
1. An electronic contract is not the same thing as an electronic signature
These get used interchangeably and they are different things. The contract is the agreement. The signature is one way of showing that somebody assented to it. A great many electronic contracts have no signature anywhere in them, and are perfectly binding regardless.
The confusion matters because it leads people to assume that an agreement without a signature is somehow provisional. It is not. A check box, a click, a reply to an email, or starting the work can all show assent. The signature is evidence, and good evidence, but it is not the thing that creates the obligation.
What to look for: whether the thing in front of you is asking for a signature or simply recording a click. Both can bind you. Only one of them tends to make people slow down and read.
2. The six kinds, and why the difference matters
At the top of the table is a document sent through a signing platform. It sits there not because electronic signatures carry more legal weight than clicks, but because the platform is purpose-built to produce evidence: a sealed copy, a timestamped audit trail, and a certificate of completion showing who opened the document and when. Every row is subject to the same law. What moves between them is the quality of the record.
The four wrap terms are the ones courts actually use. Scrollwrap puts the terms in front of you and holds the button inactive until you have scrolled through them, which is the most demanding design and the most defensible. Clickwrap asks for a check box or an I agree click next to a link to the terms, and these are routinely enforced. Sign-in wrap is the contested case: the same click, but the notice is text beside the button rather than a box you check, so everything turns on how the screen was designed. Browsewrap posts the terms somewhere and treats using the site as acceptance, and it is the one where a company most often discovers it has no agreement at all.
Email exchanges sit outside that taxonomy because there is no screen to assess. They are governed by ordinary formation rules, and the difficulty with them is usually evidential rather than legal, since a thread often does not make clear which version was final.
What to look for: which of the six you are in. If nobody asked you to click anything, you may be in the bottom row, where whether the terms bind at all has been contested successfully.
3. Why some online agreements bind you and others do not
When somebody says they never read the terms, which is almost always true, the question a court asks is not whether they read them. It is whether they were on notice of them. The Ninth Circuit set out a two part version of that inquiry notice test in Berman v. Freedom Financial Network in 2022, and what makes this area unusual is how concrete the answers are. These cases turn on font size, link color and where a sentence sat on a screen. Two caveats before the figure. The test applies where the user did not have actual knowledge of the terms, since somebody who knew about them can be bound regardless of how the screen looked. And these are federal appellate decisions binding only in their own circuits, on a formation question that is ultimately governed by state law.
The test, and the design choices that have decided real cases. Quotes taken from the opinions. Last reviewed September 2026.
The clearest illustration of the failing side is Nguyen v. Barnes & Noble, decided by the Ninth Circuit in 2014. Barnes and Noble had a Terms of Use link on every page of its site, close to the buttons users had to click. The court held that a conspicuous hyperlink on every page, without more, and without prompting users to take any affirmative action to demonstrate assent, was not enough to give rise to constructive notice even given that proximity. The terms were there. Nobody had been asked to agree to them.
The clearest illustration of the working side is Meyer v. Uber Technologies, decided by the Second Circuit in 2017 under California law. The payment screen held only the card fields, the buttons and the warning, the whole screen was visible without scrolling, and the hyperlinks were blue and underlined. The court described the notice as spatially coupled with the register button and temporally coupled with the registration itself, and found reasonably conspicuous notice and unambiguous assent. Worth noting what happened next: it vacated the decision below and sent the case back to consider whether Uber had waived arbitration anyway. Winning on formation is not the same as winning.
That gap matters generally. Notice and assent decide whether a contract was formed. One that was properly formed can still be defeated on other grounds, including unconscionability and state consumer protection rules, and those are argued separately.
What to look for: whether you were ever asked to do something specifically directed at the terms. That single question separates most of the solid agreements from most of the doubtful ones.
4. The uncomfortable part, which is that this works
Read those two cases together and the practical lesson is not reassuring for consumers. To form the contract, the law does not require that you understood the terms, or read them, or could reasonably have been expected to finish them. It asks whether you were given a fair opportunity and then did something unambiguous.
A company that puts a clear sentence next to a clear button, with a blue underlined link, has generally met that standard in the courts that have considered it. Nobody has to open the link. In the best known study of the question, most participants skipped the privacy policy entirely and spent a median of well under a minute on terms the researchers estimated would take a quarter of an hour to read. The design that satisfies a court on formation is also the design you click through in two seconds.
Formation is not the end of it. Terms that were properly formed can still be attacked as unconscionable, and some states will not enforce particular clauses however clearly they were presented. But that is a fight after the fact, and a much harder one than reading would have been.
That is worth sitting with, because it reframes what reading a contract is for. It is not a formality you can skip on the theory that unread terms cannot bind you. On the clickwrap and sign-in wrap side of the line, they very much can.
What to look for: the moment you are about to click something labeled Agree, Continue or Place order with terms named next to it. That is the moment the agreement forms, and it is the last moment at which reading is free.
5. The clause that lets them change it later
Most consumer terms include a provision saying the company may change them at any time, sometimes with the addition that continued use of the service means you accept the new version. It is one of the most consequential paragraphs in any electronic contract and one of the least examined, because it means the document you agreed to is not necessarily the document you are held to.
Courts have been less comfortable with these than the clauses assume, at least where a change was made with no notice at all. The Ninth Circuit held in a 2007 case that a company could not bind a customer to revised terms simply by posting them on a website, on the straightforward ground that somebody cannot assent to an offer they do not know exists.
Where notice is given, though, continued use provisions are more often enforced, and the argument shifts to other ground, such as whether a promise the other side can rewrite at will is much of a promise. This is less settled than the notice cases and it varies by state.
What to look for: whether the amendment clause promises any notice at all, whether notice means an email or simply a new date at the top of a page, and whether your continued use is stated to be acceptance.
6. What to check before you agree to one
Most electronic contracts are not worth a close read, and pretending otherwise is how people end up reading none of them. The ones that are worth it are the ones with money, data or a long commitment attached.
- Whether there is an arbitration clause, and whether it waives class actions.
- What the cancellation terms are, and whether the subscription renews automatically.
- What happens to your data, and what rights you are granting over anything you upload.
- Whether the company can change the terms, and whether it has to tell you.
- Which state's law governs, and where a dispute would be heard.
- What you are actually paying, including anything that starts after a trial ends.
Six answers is a five minute read on most consumer terms, and it covers the issues that most often surface later. It is not the whole document. Limitation of liability, indemnities and any window for opting out of arbitration are worth a look too, and the opt-out window is often the only one of these a consumer can actually act on.
Where RateMyContract fits in
The reason people click through terms is not laziness. It is that the document is long, the language is unfamiliar, and there is no obvious place to start looking. RateMyContract exists to remove that first barrier: upload the agreement and it works through the document in plain English and highlights clauses that look unusual or one sided, so you have a view on which paragraphs deserve your attention.
It is most useful on exactly the documents this post is about, which are the ones nobody reads because reading them feels disproportionate to the moment. What it does not do is tell you whether a particular agreement would be enforced against you, assess your legal position, or give legal advice. Those are questions for a lawyer.
When to talk to a lawyer
Most electronic contracts never need one. It is worth paying for advice where a business is putting its own terms online and needs them to hold up, since that is a design question as much as a drafting one and the cases above show how easily it goes wrong. It is also worth it where you are being held to terms you do not believe you agreed to, where an agreement involves substantial money or a long commitment, and where terms appear to have changed since you signed up and the change matters.
The short version
An electronic contract is any agreement made in electronic form, and the category covers six quite different things. A document signed on a platform, scrollwrap, a check box, a Register button with fine print, an email exchange, and terms sitting unread behind a footer link. The first three are strong, the next two depend on the facts, and the last is often unenforceable. In the courts that have looked closely at this, what decides it is whether the person was given reasonably conspicuous notice and then did something unambiguously showing agreement, rather than whether they read anything. Formation is only the first question, and a formed agreement can still be challenged on other grounds.
If an electronic contract is in front of you now, RateMyContract will read it back in plain English before you click. For the underlying rules on what makes any agreement binding, what is a contract covers the four elements and which agreements have to be in writing. If you are the one sending a document out for signature, how to create an electronic contract online covers the process and the validity conditions in detail, and the contract checklist works through a document point by point.
Frequently asked questions about electronic contracts
Is an electronic contract legally binding?
Generally yes. Federal law provides that a contract cannot be denied legal effect solely because an electronic record was used in its formation, and state law says the same, subject to a carve-out covering wills, most family law matters, court filings and several notice types. The electronic form is not the issue. What varies is whether the person clearly agreed, which is why a check box holds up more reliably than terms sitting behind a footer link nobody was asked to open.
What is the difference between an electronic contract and an electronic signature?
The contract is the agreement itself. The signature is one way of showing that somebody assented to it. Plenty of electronic contracts have no signature at all and are still binding, because a check box, a click or a reply can each show assent. The signature is evidence of agreement rather than the thing that creates the obligation.
Are website terms enforceable if I never clicked agree?
Often not. Where terms sit behind a link and nothing asks the user to agree, courts have repeatedly declined to enforce them. The Ninth Circuit held in a 2014 case involving Barnes and Noble that a conspicuous link on every page, close to the buttons users click, was still not enough on its own to put users on notice, and refused to compel arbitration on that basis. Outcomes depend on the facts and on the state whose law applies.
What is the difference between clickwrap and browsewrap?
Clickwrap asks you to take an action aimed at the terms, such as checking a box or clicking I agree next to a link to them. Browsewrap posts the terms somewhere on the site and treats your use of the site as acceptance. Clickwrap is routinely enforced. Browsewrap frequently is not, because nothing shows the user ever agreed.
Can a company change an electronic contract after I agree to it?
Most consumer terms claim they can, often adding that continued use means acceptance. Courts have been less comfortable with that than the clauses assume where a change was made with no notice at all, on the reasoning that nobody agrees to something they were never told about, and the Ninth Circuit so held in 2007. Where notice is given, these provisions are more often enforced. How much protection you have varies by state and by the facts.
Do I have to read the terms for them to be binding?
No, and this is the part people find surprising. Where a user did not have actual knowledge of the terms, the Ninth Circuit asks whether they were given reasonably conspicuous notice and then took some action unambiguously showing assent. A well designed screen satisfies that whether or not anybody opens the link. Not reading is not by itself a defense on the clickwrap side of the line, though a formed agreement can still be attacked as unconscionable.
