New York Court Finds Clickwrap Process Sufficient To Establish Valid Agreement To Arbitrate

In the case of Wu v. Uber Tech., Inc., decided by the New York Court of Appeals on November 25, 2024, the court ruled in favor of Uber, compelling arbitration and denying the plaintiff’s motion to stay arbitration. A copy of the 5-2 opinion can be found here.

The plaintiff, Emily Wu, filed a personal injury lawsuit against Uber after being injured in a car accident while using Uber’s service. Uber responded by asserting that Wu had agreed to arbitrate any disputes by accepting the updated terms of use implemented two months after she filed her lawsuit, which included an arbitration agreement.

When Wu next opened the Uber app, she was presented with a pop-up screen notifying her of Uber’s updated terms of use and provided with links to the updated terms/ The updated terms including the updated arbitration agreement. Wu was required to both click a checkbox indicating her review of those terms and to click a “confirm” button as a condition of continuing to use Uber’s services, which she did.

The court found that Wu had agreed to the arbitration clause by clicking “Confirm” on a pop-up click both a checkbox indicating her review of those terms andscreen when she logged into the Uber app after receiving an email about the updated terms. This clickwrap process was deemed sufficient to establish a valid agreement to arbitrate.

A clickwrap agreement is one where the user accepts the applicable terms by checking a box that states that the user agrees to the terms before the user can continue using the site or app or complete the applicable user flow.

The updated terms included a delegation provision, which stated that any disputes about the agreement’s applicability or enforceability would be decided by an arbitrator. The court upheld this provision, meaning Wu’s challenges to the arbitration agreement’s validity would be resolved by an arbitrator.

The court determined that Wu was on inquiry notice of the arbitration agreement because Uber provided clear notification via email and an in-app pop-up screen. The court found that Wu had sufficient notice of the terms and chose to proceed with using the app.

Wu argued that Uber’s mass communication of the updated terms during the pendency of the action violated ethical rules. However, the court found no abuse of discretion in the lower court’s decision not to sanction Uber for this alleged violation.

The ruling underscores the importance of carefully reviewing and understanding the terms of service when using online platforms, as agreeing to such terms can have significant legal implications.

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