Massachusetts Supreme Court Reviews Legality of Uber’s “Terms of Use”
The Massachusetts Supreme Court recently heard arguments in a case that could have significant implications for e-commerce. The case centers around when online companies’ “terms of use” can be considered legally enforceable. The court’s ruling will determine whether a pop-up screen on the Uber app, requiring users to agree to a 12-page contract, waived the right to sue in a specific case involving a passenger who was left quadriplegic after an accident caused by a driver with a checkered history.
Justice Questions Legitimacy of Uber’s Contract Language
During the hearing, Justice Scott Kafker highlighted concerns about the language used in Uber’s pop-up screen, describing it as “opaque,” “vague,” and “less than obvious.” He argued that Uber should have used clearer language that explicitly stated users were entering into a significant contract, surrendering their right to sue the company even in cases of severe harm.
The plaintiff’s attorney, Matthew Wessler, emphasized that ordinary people do not associate “terms of use” or “terms and conditions” with a lengthy and complex contract. He argued that Uber’s use of such language was misleading and did not adequately inform users of the consequences of agreeing to the terms.
Uber’s Pop-up Screen: Adequate Notice or “Opaque” Language?
Uber’s defense centered on its pop-up screen, which required users to check a box stating they had reviewed and agreed to the updated terms. However, a lower court judge had previously ruled that this was still insufficient because the pop-up did not clearly indicate that users were entering into a new binding contract. The judge suggested that Uber could have required users to scroll through the agreement before clicking, similar to what Lyft does.
The U.S. Chamber of Commerce submitted an amicus brief in support of Uber, expressing concerns that the lower court’s ruling could create challenges for businesses operating in an online environment. They argued that the court’s decision should not make it overly burdensome for companies to operate in the digital space.
Divided Opinions on Whether Uber Users Entered into Binding Contract
During the hearing, the justices appeared to have differing opinions on whether Uber’s users were aware they were entering into a binding contract. Justice Dalila Wendlandt seemed to believe that Uber provided users with reasonable notice of the contract’s terms. However, others, including Justice Kafker, expressed doubts about the language used in the pop-up screen.
Uber’s lawyer, Michael Huston, pointed out that the pop-up screen included a statement encouraging users to read the updated terms in full. However, Justice Serge Georges questioned the use of the word “encourage,” suggesting it undermined the requirement for users to agree to the terms.
Narrow Ruling Likely in Massachusetts Supreme Court Case on Uber’s Terms of Use
Justice David Lowy indicated a potential inclination towards issuing a narrow ruling. He expressed concerns about Uber’s failure to disclose that the original terms had been struck down in 2021, leading users to believe they were signing an update rather than an entirely new contract. This focus on specific elements of the case suggests the court may deliver a ruling that addresses these particular issues, rather than making a broader statement on the enforceability of online terms of use.
The outcome of this case could have far-reaching implications for the e-commerce industry, potentially establishing new standards for the enforceability of online terms and conditions. It remains to be seen how the Massachusetts Supreme Court will assess the language used in Uber’s pop-up screen and determine the level of notice and consent required for users to enter into binding contracts in the online realm.
Analyst comment
Positive news: The Massachusetts Supreme Court reviews the legality of Uber’s “Terms of Use” and expresses concerns about the language used in the pop-up screen. There are divided opinions on whether users entered into a binding contract. The court may issue a narrow ruling addressing specific elements of the case. The outcome could establish new standards for the enforceability of online terms and conditions, impacting the e-commerce industry.
