Consumer Contracts Posts

October 2018 Council Updates

During its meeting in New York City on October 18 and 19, the ALI Council reviewed drafts for seven Institute projects. Drafts or portions of drafts for six projects received Council approval, subject to the meeting discussion and to the usual prerogative to make nonsubstantive editorial improvements.

First Circuit: Uber Users Did Not Give Unambiguous Assent to Terms of Service

In the defining decision, Cullilane v. Uber Technologies, the First Circuit Court of Appeals reversed a district court’s grant of Uber Technologies’s motion to compel arbitration and dismiss the complaint of a putative class action brought by users of Uber’s ride-sharing service in the Boston area. At issue in the case was the enforceability of an online contract’s arbitration clause. This decision strongly reinforces the notion that online contract processes should be designed, and the information arranged, for consumers and with extreme attention to detail and a focus on clarity of meaning.

Ninth Circuit Deems Amazon’s Conditions of Use Enforceable, Plaintiff’s Deceptive Pricing Claims Arbitrable


The Ninth Circuit’s no-nonsense decision recognizes that, under basic principles of contract law, online consumer contracts may be enforced so long as notice is conspicuous and acceptance is unambiguous. It is an important win not only for but also retailers generally.

Second Circuit Issues Important Decision Regarding Online Contract Formation and Arbitration Agreements

Last year, the Southern District of New York refused to enforce Uber’s Terms of Service because it believed that the agreement’s placement was inconspicuous and the consumer’s acceptance was ambiguous. Last week, the Second Circuit vacated that order and found that the agreement had been reasonably disclosed and unambiguously accepted.

Third Circuit Rules Samsung Cannot Compel Arbitration

In Noble v. Samsung Electronics America, Inc., the plaintiff, after purchasing a smartwatch that advertised “24 to 48 hours with typical use,” found that the device’s batter only lasted for a few hours. When he determined that other customers were experiencing the same issue, he filed a class action complaint in federal court. Samsung then sought to compel arbitration based on a clause in the “Health and Safety and Warranty Guide,” which is included in every box when purchased.