Wade Clark Mulcahy LLP

Technology impacts every aspect of modern life and has become so commonplace that it is hardly noticed. People regularly sign up for on-line accounts, rushing through the preliminary steps and checking all the required boxes to access account services quickly. Most people do not take the time to read the agreements behind the hyperlinks, which often limits a consumer’s rights including the right to a trial by jury of any legal dispute. Courts frequently address the implications of clicking the “I agree” box in an online account.

In Williams v. Ysabel, the New Jersey Appellate Division recently addressed these issues and affirmed a trial court decision to compel arbitration and dismiss lawsuit claims against the rideshare service Uber. In that case, the plaintiffs had registered for Uber accounts online, each following the same process of checking the box to indicate that he or she had ‘reviewed and agreed to the Terms of Use’ and clicking ‘confirm’. Section 2 of the "Terms of Use" document provides in clear terms that claims against Uber must be resolved by arbitration and that they waived the right to a jury trial.

Plaintiffs were injured in an accident while riding in an Uber and sued the company and other defendants in the Superior Court of New Jersey. The Uber defendants moved to compel arbitration and dismiss the claims against them. Plaintiffs admitted that they clicked the box agreeing to Uber’s terms and conditions but asserted that the “pop-up” did not expressly advise them of the arbitration agreement and that they were “not directed to or required to read” the Terms of Use. The trial court granted the motion and dismissed the case with prejudice, finding that the agreement was an enforceable “clickwrap” agreement requiring a user to consent to any terms or conditions by clicking on a dialog box on the screen. The trial court also found that plaintiffs knew they were executing an agreement containing terms that plainly waived a trial by jury.

The Appellate Division affirmed the decision to compel arbitration, agreeing that the Uber agreement was an enforceable “clickwrap” agreement. The Court observed that New Jersey courts have recognized the validity of consumer web-based contracts for decades and that clickwrap agreements are routinely enforced. The Court found that the arbitration agreement was enforceable because: (1) it was located within a clearly hyperlinked document; (2) the title and language appearing below the hyperlinks put plaintiffs on “reasonable inquiry notice” that by checking the box they were agreeing to Uber's “Terms of Use”; and 3) the title of the arbitration provision withing the Terms of Use appears in larger, bold print. By checking the box, plaintiffs represented they had reviewed and agreed to the Terms of Use and signaled their assent to those terms, including the arbitration agreement. However, the Court reversed the trial judge’s decision to dismiss the claims in the lawsuit with prejudice, finding that the claims would instead be stayed pending the arbitration.

The Williams case serves as a reminder that online arbitration agreements are enforceable in New Jersey if they are located within a hyperlinked document, are clearly marked in large, bold print, and clearly put users on notice that by checking the box they agree to the contract’s terms. Not reading the terms is not a defense to the enforcement of such provisions.