On-line Arbitration Agreements: A Tale of Two “Click Wraps”
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What makes an on-line arbitration agreement binding against a website user? In Meyer v. Uber Technologies, Inc., 2017 U.S. App. LEXIS 15497 (2d Cir. Aug. 17, 2017), the U.S. Court of Appeals for the Second Circuit issued a second decision on this issue, providing additional elucidation following its 2016 decision in Nicosia v. Amazon, Inc. 834 F.3d 220 (2d Cir. Aug. 24, 2016).The Nicosia and Meyer cases each involved an on-line agreement with a user who claimed not to have read the company’s terms and conditions, including an arbitration clause. In Meyer, Uber’s agreement to arbitrate was held to be enforceable against the user; in Nicosia, Amazon’s was not—at least on the record before the Court of Appeals.
In each case, the foundation principle was that “parties are not required to arbitrate unless they have agreed to do so.” In each case the user had, at some point, clicked an online button that the company maintained constituted an acceptance of “terms and conditions.” And in each case, the user claimed not to have read the terms and conditions. To determine whether a binding contract had been formed, the court evaluated whether the users had “inquiry notice” of the arbitration terms and conditions when they respectively clicked “Register” (in the Uber app) and “Place Your Order” (on the Amazon web page).
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