In Harris v. W6LS, Inc., No. 24-2056 (March 31, 2026) N.D. Ill., Eastern Div.. the plaintiffs went online and borrowed $600 from defendants at interest rates of nearly 500% per year. Both of the loans violate Illinois’s statutory limits on interest. They later sued, invoking their consumer rights under Illinois and federal law. Defendants sought to enforce an arbitration provision in their loan contracts delegating all questions of arbitrability to the arbitrator, while also requiring that these questions be resolved under a body of tribal contract law that did not exist at the time the plaintiffs took out their loans. Defendant W6LS, Inc. offers consumer loans online as “WithU Loans.” W6LS is a corporation organized under the laws of the Otoe-Missouria Tribe of Indians. The Tribe maintains an ownership stake in the defendant. The district court denied the motion to compel arbitration and defendants appealed.
On appeal, the Seventh Circuit noted that it is well-established that “arbitration is a matter of contract,” citing Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010). And it further noted that contracts require mutual assent. The arbitration agreement delegates to the arbitrator the “threshold” questions of whether the parties agreed to arbitrate their disputes and whether the claims at issue fall within the scope of that agreement. The agreement further states that the arbitrator should use “Applicable Law,” which is defined elsewhere in the loan agreement as “Tribal Law and applicable federal law,” to resolve these questions. “Tribal law” refers to law enacted by the Otoe-Missouria Tribe or the Otoe-Missouria Consumer Finance Services Regulatory Commission. Although the Tribe adopted a Tribal Contract Code on May 2, 2024, this code was not in place at the time Harris and Olds entered into the Loan Agreements
The Seventh Circuit thus affirmed, finding that there was no mutual assent where the arbitration agreement directed the arbitrator to apply a body of law that did not exist and which the defendants maintained a unilateral ability to invent. Moreover, there was no indication that the plaintiffs intended to agree to those terms.