The Court of Appeals for the Second Circuit ruled that customer Meyer agreed to arbitrate his claims with the ride hailing company Uber by agreeing to the Terms of Service (TOS) linked to the Uber APP on Meyer’s cell phone. Meyer v. Uber Technologies, et al., Case No. 16-2750 (2nd Cir. August 17, 2017) (Available Here). However, the Court of Appeals remanded the case for a determination of whether Defendant Uber waived its right to arbitrate by actively litigating the case.
The 2nd Circuit applied California state law finding that, only if the undisputed facts establish that (a) there is a reasonably conspicuous notice of the existence of contact terms and (b) the customer unambiguously manifested his or her assent to those terms, then the Court will find that a contract had been formed.
The Court found that as long as the hyperlinked text was itself reasonably conspicuous – and the 2nd Circuit Court herein concluded that it was – a reasonably prudent smartphone user would have constructive notice of the terms and conditions in the TOS. The Court found that the Uber APP provided reasonably conspicuous notice of the Terms of Service as a matter of California law.
The Court also found that customer Meyer unambiguously manifested his assent to Uber’s Terms of Service. The registration process clearly contemplated some sort of continuing relationship between the putative user (that is, Meyer) and Uber, that a prudent person would understand that the interrelationship of Uber and the customer one would require some terms and conditions, and the Uber Payment screen provided clear notice that there were terms that governed the relationship. Although the 2nd Circuit ruled in favor of Uber on this contract issue, the Court of Appeals remanded the case for a determination of whether Uber waived their right to arbitrate by actively litigating the case.