BOSTON (CN) — In a case that could potentially upend e-commerce nationwide, the Massachusetts Supreme Court heard arguments Friday on when online companies’ “terms of use” are legally enforceable.
The question was whether a pop-up on the Uber app — requiring users to click their agreement to a 12-page, single-spaced contract — meant that a rider gave up his right to sue after a driver with a checkered history caused an accident that left the passenger a quadriplegic.
“Ordinary people do not associate ‘terms of use’ or ‘terms and conditions’ with an extensive contract that requires them to sign their lives away,” the plaintiff's attorney, Matthew Wessler, told the court.
Justice Scott Kafker described the language on Uber’s pop-up as “opaque,” “vague” and “less than obvious.” He said Uber should be required to use language “that puts you on notice that you’re entering into a contract that’s significant. You’re giving up your right to sue Uber. If you get killed or raped, Uber is off the hook.”
Wessler’s client, William Good, claimed Uber negligently sent him a driver with a record of 20 moving violations. Uber argued that the case had to go to arbitration under its online terms.
This is the second time that Uber has faced the state high court. In 2021, the court rejected Uber’s then-current online agreement because it didn’t require users to affirmatively agree to anything. Rather, at the bottom of the screen on which users entered their credit card information, it merely said “"By creating an Uber account, you agree to the Terms & Conditions.” It offered a link to the terms but didn’t require a separate acknowledgement.
In response to the 2021 case, Uber created a pop-up screen for users saying “We’ve updated our terms,” along with a link. Before users could order a ride, they had to check a box saying “I have reviewed and agree to the terms,” and then click a box marked “Confirm.”
A lower court judge said this still wasn’t good enough, because the pop-up didn’t make clear that users were agreeing to a new binding 12-page contract, as opposed to merely confirming that there had been some unspecified updates. The judge suggested that Uber could have required users to scroll through the agreement before clicking, which is what Lyft does and what Uber does in its agreement with its drivers.
The U.S. Chamber of Commerce submitted an amicus brief in the case, complaining that the lower court’s “Monday-morning quarterbacking … would make it difficult for businesses to operate in our increasingly online world.”
The judges seemed divided, with Justice Dalila Wendlandt appearing to believe that Uber provided Good with reasonable notice that he was entering into a binding contract. But others weren’t so sure.
“Terms of use” is “not any language typical of 'you’re entering into a contract,'” Kafker said. “It’s not clear … . It might be good enough for government work, but it’s not the same.”
Uber’s lawyer, Michael Huston of Perkins Coie in Washington, D.C., noted that the pop-up stated, “We encourage you to read our updated terms in full.”
But Justice Serge Georges called this language “aspirational,” adding, “When you say encourage, that seems to be almost, ‘Hey, you can or you can’t.’”
“We can’t force anyone to read a contract,” Huston replied.
“But you do it with your drivers,” Kafker shot back.
“The question is, would a reasonable person have known that they were entering into an agreement?” Huston answered. “Evidence shows that people don’t read long contracts. Even if, in a mortgage, you make them initial every paragraph, they still don’t read it.”
“But in a mortgage, you know it’s a mortgage,” Kafker responded. “In an auto loan, you know it’s an auto loan.”
Georges worried that the pop-up, which blocked users from ordering a ride until they clicked to confirm, put undue pressure on them to agree so they could get where they needed to go.
“Mr. Good worked all day and he just wanted to go home,” Georges told Huston. “You make it sound like that’s the most opportune time to sit back and review all these terms and conditions. When would be a worse time than when you’re leaving a bar, you’re leaving work, and you just want to go home?”
Wessler, of Gupta Wessler in Cambridge, Massachusetts, picked up on this, arguing that Uber forced people to agree “at the point at which a user is most vulnerable,” such as when “they’re running late to get to the airport.” He suggested that Uber could have sent an email announcing the new terms, which is what Lyft does.
Huston responded that Good wasn’t injured until five days after he clicked on the pop-up, so he could have reviewed the terms at his leisure during that time.
Justice David Lowy seemed inclined to issue a narrow ruling. He appeared to believe that what Uber did was fine for an initial contract, but he was troubled by the fact that Uber told Good that it had “updated our terms” without revealing that the initial terms had been struck down in 2021, and thus it was asking him to sign a brand-new contract rather than an update.
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