Massachusetts SJC Enforces Uber’s Clickwrap Arbitration Agreement in Good v. Uber

In a decision having important implications for tech companies and consumers alike, Good v. Uber Technologies, Inc., 494 Mass. 116 (2024), the Massachusetts Supreme Judicial Court (SJC) upheld Uber’s clickwrap arbitration agreement, setting an important precedent for digital contracts. The 5-1 ruling reversed a lower court’s decision, finding that Uber provided sufficient notice of its terms and secured a valid manifestation of assent from users through its app interface.

Key Points of the Case:

1. Background: The case arose when a user filed a lawsuit against Uber following a serious injury during an Uber ride. Uber sought to compel arbitration based on its terms of use, which included a binding arbitration clause. The user contested the enforceability of Uber’s terms of use, arguing inadequate notice and lack of consent.

2. Court's Reasoning:

   • The SJC applied the Kauders two-prong test, evaluating whether Uber provided reasonable notice of its terms and whether the user’s actions constituted a reasonable manifestation of assent.

   • The Court found that Uber’s app design effectively communicated its terms: (1) users had to check a box affirming they had read and agreed to the terms before proceeding; and (2) the interface included visual cues like a clipboard graphic with an ‘X’ overlayed by a pencil graphic to emphasize the contractual nature of the action.

   • The majority held that a user’s failure to open and read the terms does not invalidate the user’s assent, as the design sufficiently encouraged review and acceptance.

3. Dissent: Justice Kafker dissented, raising concerns about whether users fully understand the binding nature of clickwrap agreements. He suggested Uber could improve transparency (e.g., by requiring users to open, and by confirming whether users have opened, the hyperlink to the terms).

4. Implications:

   • This decision solidifies the enforceability under Massachusetts law of clickwrap agreements, even in the consumer context, when designed to meet reasonable notice and assent standards.

   • Companies, especially business-to-consumer (B2C) companies, relying on digital contracts may look to this case for guidance, but should also beware of the deficiencies noted in the dissenting opinion and the plaintiff’s arguments.

For consumers, the case underscores both the importance of reviewing digital agreements before accepting them and the gravity of the consequences of accepting them (e.g., being subject to binding arbitration, which could drastically limit the user’s potentially-recoverable damages).