Learn From Uber’s Miscues to Ensure Your Electronic Agreement Is Enforceable

In a recent decision issued by the Massachusetts Superior Court (Good v. Uber Technologies, 2022 WL 10448746), Uber was foiled again – even though it had initiated what it must have thought were fool-proof protocols to prevent it from being hauled into court.

William Good had been an Uber user since August 13, 2013, and on April 25, 2021, he tried to order a ride but was blocked by a pop-up message stating: “We’ve updated our terms.” The pop-up message went on to say: “We encourage you to read our updated in Terms in full.” Among those terms was a provision stating that Uber’s customers were “required to resolve any claim against Uber … in arbitration.”

The pop-up screen also contained a blue, underlined hyperlink entitled “Terms of Use,” and at the bottom of the screen in bold font, it stated: “By checking the box, I have reviewed and agree to the Terms of Use.” To the left of the statement was a check box, and immediately below was a black bar with the word “Confirm.” While Good had to click that box and tap the confirm button in order to continue and book his ride, nothing required Good to actually click on the link to the Terms of Use and scroll through them.

Good clicked and tapped and was able to get his ride, but Good’s driver got into a horrible accident, leaving Good paralyzed. Thereafter, Good sued Uber in the Massachusetts Superior Court, and Uber, predictably, moved to stay the litigation and compel Good to arbitrate pursuant to the arbitration clause in the updated Terms of Use.

In discussing the matter, the Superior Court Judge made clear that the ultimate issue was whether by checking the box in the pop-up message and tapping “confirm,” Good had entered into a contract to be bound by the Terms of Use. In this regard, the Judge noted that the Supreme Judicial Court’s decision in Kauders v. Uber Technologies, Inc.  was controlling, and resolving the issue required the application of “a two-prong test, focusing on whether there [was] reasonable notice of the terms and a reasonable manifestation of assent to those terms.” The Superior Court Judge then went on to rule that no contract was formed “because there was not reasonable notice of the terms of a binding contract.” In this regard, the Judge pointed to the following key factors:

[First, t]he pop-up – which interrupted Good’s attempt to order an Uber vehicle – did not reasonably convey that checking the box constituted an agreement to a contract. The pop-up’s header indicated only that Uber had “updated” its terms. It then merely “encouraged” the user to read the updated terms. The pop-up nowhere indicated that the Terms of Use constituted an agreement or contract, or that the user would be bound by the provisions contained therein. The pop-up did not “reasonably notify [Good] that there are terms to which [he] will be bound.”

 

Second, Good was not required to click on the hyperlink before continuing and ordering a vehicle.

Although the Superior Court Judge acknowledged that in some instances a so-called “clickwrap” agreement — where a party only represents they have reviewed a provision, even though they may not have done so — can be enough to satisfy the notice provision, “the mere provision of the opportunity to review the Terms of Service, standing alone is not enough to establish that the terms were reasonably communicated.” The better course of action is to use a “scrollwrap” agreement, where a party is forced to click on the terms and cannot check a box indicating that they have read them until they scroll through to the end. Indeed, the Superior Court Judge noted that “Had Good been required to click on the Terms of Use, and scroll through the terms, the outcome of this Motion may [have been] different.”

While Uber has appealed, and the refusal to grant Uber’s Motion to Stay and Compel Arbitration could be overturned, that may not happen for some time. In any event, there seems no reason for in-house counsel not to heed the Superior Court’s admonition and use a scrollwrap agreement to provide greater assurance that on-line contracts will be enforceable as intended.