Earlier this month, the Massachusetts Supreme Judicial Court (“SJC”) heard oral arguments in Good v. Uber Technologies, Inc. et al. At issue is whether Uber’s in-app pop-up screen provides to its customers reasonable notice of the terms of use containing, among other things, a binding arbitration clause, and whether this mechanism is sufficient to secure a reasonable manifestation of assent from the customer. At the Trial Court, Uber moved to compel arbitration against a customer who filed suit after suffering serious injuries while using Uber’s services. But the Trial Court denied the motion after finding that the agreement to arbitrate was not enforceable. The sufficiency of notice issue pertains to a smartphone pop-up screen which stated that Uber had updated its terms and encouraged users to read the updated terms, provided hyperlinks to the terms of use and privacy notice, and provided a checkbox for the user to confirm review of and indicate agreement with those terms.
Only three years ago, the SJC had sided against Uber in finding an agreement to arbitrate unenforceable against Uber’s customers, in a slightly different iteration of the issue stemming from Uber’s app registration process. See Kauders et al. v. Uber Technologies, Inc. et al. Applying the analytical framework supplied by that opinion, the Trial Court in Good v. Uber Technologies, Inc. et al. found that the pop-up did not provide reasonable notice to customers regarding the terms of use, including the agreement to arbitrate. “Had [the customer] been required to click on the Terms of Use, and scroll through the terms, the outcome…may be different,” the Trial Court opinion notes. A clickwrap or click-through agreement usually “appears on an internet webpage and requires that a user consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with the internet transaction.” In contrast, a scrollwrap agreement “requires users to physically scroll through an Internet agreement and click on a separate ‘I agree’ button in order to assent to the terms and conditions of the host website.” The Trial Court found this distinction important because the SJC has “indicated that a scrollwrap agreement provides reasonable notice of the internet contract’s terms and conditions, whereas a clickwrap agreement…only may, depending on the associated language.” As the SJC noted in Kauders, for Internet transactions, “the specifics and subtleties of the ‘design and content of the relevant interface’ are especially relevant.”
While it remains to be seen how the SJC will decide Good, it is likely that scrollwrap agreements provide better protection for companies conducting business in Massachusetts that wish to enter into online contracts with customers. For companies wishing to continue using clickwrap agreements, a nuanced analysis may be needed to ascertain enforceability.