In Kauders v. Uber Technologies, Inc. (Massachusetts Supreme Judicial Court No. SJC-12883, January 4, 2021), the plaintiff commenced a discrimination action against Uber Technologies, Inc. (“Uber”) in the Massachusetts trial court. Pointing to a dispute-resolution provision of the “terms and conditions” imposed when a user registers with Uber, Uber sought to compel arbitration. The plaintiff opposed arbitration, contending that the “terms and conditions” did not create an enforceable contract.
While the court sided with the plaintiff and found no enforceable contract, the case includes troubling language for unsuspecting consumers.
Facts: Uber, a ride-share service, requires users to register with it before using its services. Registration may take place through a cellular telephone application (“app”). The mobile app registration process proceeds through three screens labeled “create an account,” “create a profile,” and “link payment.”
The first and second screens were fundamental--requiring personal information--and the court focused on the third screen--that screen addressing payment for services and the “terms and conditions” of the relationship between Uber and the to-be-registered user.
The bottom of the “payment” screen provided: “By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy.” The text “Terms and Conditions and Privacy Policy” was displayed in a rectangular box and in bold--indicating that the box was a clickable hyperlink. If a user clicked the hyperlink the user could view the “Terms & Conditions” and “Privacy Policy.” On the other hand, if the user provided payment information, a button labeled “DONE” became clickable. Once the user clicked "DONE," the user completed the account creation process. Thus, the app permitted the user to complete the registration process without ever visiting the “Terms and Conditions” or “Privacy Policy” page.
The court highlighted some of the “terms and conditions” (here paraphrased):
Uber has no responsibility or liability for any transportation services provided to you by third party transportation providers (i.e., drivers).
Uber shall not be liable for any loss, damage or injury which may be incurred by you . . . You expressly waive and release Uber from any and all liability, claims or damages arising from or in any way related to the third party transportation provider. Uber is exempt from all liability for any indirect, punitive, special, exemplary, incidental, consequential or other damages of any type or kind, including personal injury and loss of data, revenue, profits, use or other economic advantage.
User must indemnify Uber for all costs Uber incurs arising out of a user’s violation or breach of any term of this Agreement or any applicable law or regulation, violation of any rights of any third party, or the use or misuse of the Application or Service.
Uber can monitor user access to or use of its service or the app, and it can provide law enforcement or a government agency with whatever user information it chooses.
Analysis: The court considered whether Uber’s “terms and conditions” constituted an enforceable contract between it and the plaintiff. The court observed that a valid contract requires notice of its terms and assent to those terms.
The court stated: “When considering whether the user assented to the terms of the online agreement, we consider the specific actions required to manifest assent. A user may be required to expressly and affirmatively manifest assent to an online agreement by clicking or checking a box that states that the user agrees to the terms and conditions. These are often referred to as ‘clickwrap’ agreements, and they are regularly enforced . . . [W]hile clickwrap agreements . . . are not necessarily required . . . , they are certainly the easiest method of ensuring that terms are agreed to.’ ”
The court noted that “the [Uber] interface did not require the user to scroll through the conditions or even select them. The user could fully register for the service and click ‘done’ without ever clicking the link to the terms and conditions.” Because a user may never have even seen terms and conditions, no contract including those terms could be created.
Commentary: Uber’s terms and conditions are onerous and likely unsuspecting and only need be subject to a “clickwrap” to be enforceable. The court noted that other vendors’ terms and conditions are imposed by “clickwrap” and are thus enforceable.
Uber’s terms and conditions--that likely are not unique to Uber--provide that the user must indemnify Uber for all costs Uber incurs arising out of the user’s use of the Application or Service. An “indemnity” is reimbursement of costs and expenses incurred by a party in responding to allegations or claims of another party. Thus, if Uber paid a large claim that was related to a ride provided to a user, the user may be required to reimburse Uber for some or all of the amount paid. For instance, if an Uber driver caused injury to a pedestrian or other driver or vehicle while providing a ride to a user, and Uber was found to be responsible for the injury, it is not inconceivable that the user would be required to reimburse Uber because Uber’s loss occurred as a result of the user’s use of the service--an occasion imposing indemnity. There may be many reasons why Uber would be reluctant to seek indemnity, but it would be preferable to avoid the possibility of indemnity rather than rests one’s hopes on Uber’s better judgment.
Even apart from the possibility of indemnifying Uber, Uber’s use of user’s data--including ride data--and providing same to law enforcement, perhaps even without a request from law enforcement--may be unwanted. (Hardly a "Privacy Policy.").
Moral of the Story: You should probably read those pesky “Terms and Conditions.”
