Let’s review the state of play:

* courts say online contracts should be categorizable as “clickwraps” or “browsewraps”
* courts usually enforce clickwraps but not browsewraps
* despite the categories, courts don’t view clickwraps and browsewraps as abutting circles on a Venn diagram. Instead, the circles apparently are partially overlapping. This is resulting in analytical confusion
* because courts don’t understand the definitions of “clickwrap” or “browsewrap,” the courts are perceiving cases on their dockets as falling into the overlap zone
* because they think cases in the overlap zone must be novel, courts are proliferating variations of “-wrap” nomenclature
* the growing semantic ambiguity is compounding the analytical confusion

 

Unconscionability

UPS’s terms were presented on a take-it-or-leave-it basis, and the sender didn’t read them. Still, there’s no surprise:

Plaintiff received notice of the UPS Terms—including the requirement for binding arbitration—through use of the WorldShip program and ups.com. Though Mr. Brown elected to “merely hit the prompts” rather than read the notifications, Plaintiff fails to show “surprise” because the terms were not hidden from view or drafted in “fine-print terms.”

The court says several aspects of the arbitration aren’t substantively unconscionable. The arbitration clause applied mutually to both side’s claims, the provision expressly said that the user’s arbitration filing fees wouldn’t exceed comparable court costs, the arbitrator had discretion to allow discovery, and the provision expressly said that the arbitration remedies matched what would be available in court.

However, the court deems two aspects of the terms substantively unconscionable:

* The provision: “UPS reserves the right to unilaterally modify or amend any portion of the Service Guide or the Terms at any time without prior notice.” Of course, we already knew those provisions are toxic (see, e.g., the uncited cases Blockbuster, Douglas, ETrade, Zappos, Safeway; but see, e.g.,Instagram). Why does your user agreement still contain this clause?

* The confidentiality of the arbitration proceedings, which the court says is unnecessary and advantages UPS.

Per California Civil Code § 1670.5(a), rather than letting those two unconscionable aspects doom the contract entirely, the court severs those aspects and deems the remainder of the contract enforceable. Lucky for UPS; may you be so lucky if you’re ever in court.

Case citation: Moule v. United Parcel Service Co., 2016 WL 3648961 (E.D. Cal. July 7, 2016)

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