ELECTRONIC EMPLOYMENT CONTRACTS

Many employees electronically enter into contracts with their employers. The entire contract is supposed to be agreed to while the employee is online. These contracts often go from one internet hyperlink to another. The content from all of the various hyperlinks are supposed to be part of the contract.

Paper contracts for commissions often have one page that explains the employee may be entitled to commissions, and a separate page that explains the bonus and commission structure. The separate pages are called extrinsic documents. These documents are supposed to be incorporated by reference which means they are called out as part of the contract, and perhaps referred to as, “Exhibit 1,” or “Exhibit A.” When new clients would call the Employment Lawyers Group they often lack the separate paper attachment with the commission formula. The same logic applies to electronic contracts, but the hyperlinks and content from numerous separate web pages form the contract and relevant attachments further specifying terms. This is all the more confusing, and leads courts to wonder what exactly the contract is.

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The problem is hyperlinks that contain contract terms are often not clear. The existence is not called out to the employee. There might even be an url listed that no longer exists. “Website users are entitled to assume important provisions disclosing contractual terms will be prominently displayed and not buried, Id. Citing to Berman at 857. Contract terms that are not readily available to the employee are not actually part of the contract. This might mean there is actually not a written contract on a particular subject matter.

Extrinsic documents are only incorporated by reference into a contract if : 1) the reference is clear and unequivocal; 2) the reference is called to the attention of the other party and he consents hereto; 3) the terms of the document are known or easily available to the contracting parties, DVD v. Kaleidescape, 176 Cal.App.4th 697. 713 (2009); Regents v. Shaw, 58 Cal.App.4th 44, 54 (1997); B.D v. Blizzard, 76 Cal.App.5th 931, 952 (2022).

ONLINE CONTRACTS ARE SUBJECT TO THE SAME LEGAL REQUIREMENTS AS PAPER CONTRACTS

“Online contracts are subject to the same elemental principles of contract formation as paper contracts, Berman, 30 F.4th 855-856. ‘To form a contract under California...law, there must be actual or constructive notice of the agreement and the parties must manifest mutual assent.’” Oberstein, 60 F.4th at 512-513 citing Berman, 30 F.4th 955. A party may manifest assent through conduct, Berman at 855. To do so, the party must intend the conduct and know, or have reason to know, the other party may infer her assent from the conduct, Id.,” Chabolla v. Classpass, 129 F.4th 1147, 1154 (9th Cir. 2025).

Particularly in the case of employment arbitration agreements, we have encountered situations where the employee has no idea what they are signing. They might click, “I consent” in a box relating to their education as a nurse. Their intention is to complete educational training and not a contract. The nature and context of the transaction and anticipation of the party seeking to be bound is important in this fact specific context. The onus is on the website owner to put users on notice of the terms to which they wish to bind.

Contract disputes are not as simple as a layperson would think. Call 818-783-7300 to start your case for breach of an employment contract.

In a scrollwrap, the user scrolls through all of the terms before the website allows her to click a box to agree, Keebaugh, 100 F.4th 1014 citing Sellers, 289 Cal.Rptr.3d 15, Chabolla at 1154. Browserwraps accept the website’s terms of use merely by browsing the site, Chabolla at 1154 citing to Sellers v. JustAnwer 73 Cal.App.4th 444, (2021). Courts generally decline to enforce browerwraps, Nguyen v. Barnes, 763 F.3d 1771, 1178-1179 (9th Cir. 2014), Chabolla at 1154.

“While [i]nternet commerce has exposed courts to many new situations, it has not fundamentally changed the requirement that ‘“[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.”’” (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 862 [200 Cal. Rptr. 3d 117] (Long).) Mutual assent, or consent, of the parties “is essential to the existence of a contract” (Civ. Code, § 1550; see also Civ. Code, § 1565), and “[c]onsent is not mutual, unless the parties all agree upon the same thing in the same sense” (Civ. Code, § 1580). “Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.” (Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 141 [127 Cal. Rptr. 2d 145]; accord, Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810–811 [71 Cal. Rptr. 2d 265].) “The parties' outward manifestations must show that the parties all agreed ‘upon the same thing in the same sense.’ (Civ. Code, § 1580.) If there is no evidence establishing a manifestation of assent to the ‘same thing’ by both parties, then there is no mutual consent to contract and no contract formation. (Civ. Code, §§ 1550, 1565 & 1580.)” (Weddington, at p. 811, “ Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 460.

Objective intent is the standard, Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1305. Case law deals with a second level inquiry asking whether the user’s actions unambiguously manifest assent to the contractual terms, Herzog, 101 Cal. App. 5th at 1296, 1304-05, Godun v. JustAnswer LLC, 135 F.4th 699, 715 (9th Cir. 2025). Here, Defendant does not get to the second level inquiry because the actual terms they want to enforce did not exist on the url they provided.

“Following California caselaw, we have held that such unambiguous manifestation of assent can only occur in the inquiry-notice context where an internet user is "explicitly advised that the act of clicking will constitute assent to the terms and conditions of an agreement." Berman, 30 F.4th at 857 (emphasis added); see also id. at 858; cf. Herzog, 101 Cal. App. 5th at 1305 (quoting same). Even strongly implicit advisement isn't enough—a webpage must explain that certain actions will be understood by the offeror to signal assent to contractual terms. Berman, 30 F.4th at 857. And it must identify what, exactly, those actions are. Berman, 30 F.4th at 858 ("[T]he notice must explicitly notify a user of the legal significance of the action she must take to enter into a contractual agreement."); Keebaugh, 100 F.4th at 1018; cf. Herzog, 101 Cal. App. 5th at 1296 ("[I]t was required to show that the content of its 'Legal' screen supports the inference that the user's action on the screen—here, clicking the checkbox—constituted an unambiguous manifestation of assent to those terms.

The doctrine of constructive notice has always been regarded as a harsh necessity; and the statutes which create it have always been subjected to the most rigid construction.” (Call v. Hastings (1853) 3 Cal. 179; accord, MacGowan v. Jones (1904) 142 Cal. 593, 595 [76 P. 503] [“Constructive notice is at the best but a poor substitute for actual notice, and is permitted by the law only through necessity”].) We decline to make it easier to establish contracts without proof that both parties were aware of the terms, as that would undermine “‘[m]utual manifestation of assent,’” as “‘the touchstone of contract.’” (Nguyen, supra, 763 F.3d at p. 1175, quoting Specht, supra, 306 F.3d at p. 29.), Weeks v. Interactive Life Forms, LLC (2024) 100 Cal.App.5th 1077, 1089.

In order to be enforceable, online users must take some action that unambiguously manifests their assent to the terms and the terms must be conspicuous and the website must provide conspicuous notice of the binding terms, Chabolla at 1154, 1155 citing to Berman at 855. The nature of the goods or services offered and the visual aspects of every page of a multi-page transaction should be considered together, Oberstein 60 F.4th 515-516 (“[T]he inquiry has always been context and fact specific, Sellers 298 Cal.Rptr. 3d 26-28, Chabolla 1155. Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1296 explained evidence was lacking that plaintiffs had actual notice of the Terms of Use, it was required to establish contract formation on a constructive or inquiry notice theory under Sellers, 73 Cal.App.5th at p. 453; see Civ. Code, § 19 [defining constructive notice] because Defendant failed to provide users with reasonably conspicuous notice of the existence of the terms to which they were to be bound. The content of its “Legal” screen failed to support the inference the user's action on that screen clicking the checkbox constituted an unambiguous manifestation of assent to those terms, including the arbitration provision under Sellers, 469.

If the employee never signs the contract, there is not a contract. If the employee signs a different version of the contract than the employer, there is not a contract. It does not help that the employee and employer are fighting about the terms of the commission agreement, or employment, and neither is signing the contract.

“Reasonable conspicuousness alone is not sufficient to bind a user - a user must agree to the terms, not merely see them, Oberstein 60 F.4th 515, Challabola at 1158. A user’s click of a button can only be construed as an unambiguous manifestation of assent if the user is explicitly advised that the act of clicking will constitute assent to the terms and conditions, Id. Citing to Berman at 857, and also stating the notice must explicitly notify the user of the legal significance of the action she must take to enter into a contract,” Chabolla 1158.

[R]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility”’”]; Berman v. Freedom Financial Network, LLC (9th Cir. 2022) 30 F.4th 849, 856 (Berman) [“an enforceable contract will be found based on an inquiry notice theory only if: (1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some action … that unambiguously manifests his or her assent to those terms”]; Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 863 [200 Cal. Rptr. 3d 117] (Long) [absent actual notice, validity of internet agreement turns on whether the provider's website puts reasonably prudent users on inquiry notice of the contractual terms], Herzog at 1296.

“‘The onus must be on website owners to put users on notice of the terms to which they wish to bind consumers.’” (Long, supra, 245 Cal.App.4th at p. 867, quoting Nguyen v. Barnes & Noble Inc. (9th Cir. 2014) 763 F.3d 1171, 1179 (Nguyen); Sellers, supra, 73 Cal.App.5th at p. 476; Weeks v. Interactive Life Forms, LLC (2024) 100 Cal.App.5th 1077, 1086 [citations] (Weeks),” Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1299. There may be questions whether the employee was properly on notice of contract terms.

Employees ready to sue for breach of an employment contract should call 818-783-7300.