“Sign-In Wrap” on Mobile Apps, 0517 SCBJ, SC Lawyer, May 2017, #30

AuthorAllyson Haynes Stuart, J.

Wrap” on Mobile Apps

No. Vol. 28 Issue 6 Pg. 30

South Carolina BAR Journal

May, 2017

Allyson Haynes Stuart, J.

A number of recent cases have addressed the validity of terms of service (TOS) agreements compelling arbitration that are purportedly entered into via a mobile application (app). Where the app uses a typical “clickwrap” agreement and requires the user to click her acceptance of the terms, courts have upheld the arbitration clause (even when the user is not required to actually view those terms).1 “Browsewrap,” at the other extreme—with no clicking required—has not been up-held.2 A third method of presenting terms, however, is gaining attention. Under this approach, the app provides that the user agrees to its terms and conditions by clicking to register or sign in to use the service, with a hyperlink to the terms provided but not required to be accessed. Here, the decisions have varied. Courts look at the proximity of the TOS hyperlink to the sign-in or registration button, to the clarity of the language linking assent to the terms, and to the prominence of that language. In addition, courts are looking at the sophistication of the plaintiffs as internet users and at the number of times the user has been presented with the app’s terms.

Upholding clickwrap

In the mobile app context, courts have upheld agreements where the user clicks acceptance to terms presented on the screen or via hyperlink. In Bekele,3 the district court granted Lyft’s motion to compel arbitration of the putative class action brought by drivers for the ride-sharing company. Lyft’s app registration process first required the input of certain information, after which the text of Lyft’s TOS Agreement appeared on the screen (and could be scrolled through to the end). At the bottom of the screen were the words, “Please agree to the Terms of Service to continue.” The user was then required to click a button labeled “I accept” in order to begin using the app, and no user could complete the registration process or use the service without accepting the TOS by clicking this button. The court found that, under Massachusetts law, the arbitration clause in Lyft’s TOS was reasonably communicated to and accepted by the plaintiffs. The agreement was not buried on another screen or hidden by a hyperlink, but was presented in full on the user’s screen using prominent bold headings for sections including arbitration. In addition, the “I accept” language clearly implied that by clicking the button with that label, the user accepted Lyft’s TOS.

Where the app presents the TOS via hyperlink rather than displaying the terms on the screen, the agreement is still enforceable if clicking clearly means acceptance of those terms. In Swift,4 the court upheld an arbitration clause in a video game mobile app’s TOS, where the app presented a hyperlink to those terms and a statement that clicking served as assent to the terms immediately under an “I accept” button. The court noted that this assent was sufficient even though the terms were not presented on the same page, because the plaintiff was provided with notice and an opportunity to review the terms prior to acceptance.5

“Sign-in wrap:” enforceability depends

More common have been cases where the user is not asked to click her acceptance of the terms per se, but instead is asked to click something else (like a registration or sign-in button), and the terms are presented near that button. Courts look at the clarity of the language tying clicking the button to acceptance of the terms and to the prominence of the terms. In some instances, courts have also looked at additional factors—the sophistication of the internet user, and whether the user has been given multiple opportunities to notice the terms.

The Uber cases

Several courts have considered the enforceability of the arbitration clause presented in various forms by the ride sharing service Uber in its mobile app terms and conditions.[6] In Cullinane,7 the first two screens in Uber’s registration process did not require a click to agree to Uber’s terms. However, the third and final screen in the process entitled “Link Payment” included, immediately below the credit card information input box, the words “By creating an Uber account, you agree to the Terms of Service & Privacy Policy.” Those words appeared in bold white lettering on a black background surrounded by a gray box that acted as a hyperlink to the TOS. After entering the payment information, the user was required to click a button with the word “Done” in the top right corner of the screen. The court found that phrase prominent enough to put a reasonable user on notice of the TOS, and unambiguous in alerting the user to the fact that creating an account will bind her to those terms.

In contrast, Judge Rakoff of the Southern District of New York denied the enforceability of Uber’s arbitration clause under slightly different facts. In Meyer,8 the court analyzed the two-step process by which the named plaintiff registered to use Uber via his smart-phone. The first screen prompted users either to register via Google+ or Facebook, or to enter their name, email address, phone number and password and click “Next.” Once the user clicked “Next,” he was directed to a second screen where fields at the top prompted him to enter his credit card information. Beneath those fields was a “large, prominent button whose width spans most of the screen,” labeled “Register.” Beneath the registration button were two similarly large buttons labeled “PayPal” and “Google...

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