Sorry, but those huge walls of terms and conditions you never read are legally binding
And what finer company than Uber to make that clear
You may never read those lengthy terms and conditions attached to every digital download or app but, in America at least, they are legally binding. Sorry.
That's the conclusion of a panel of appeal judges earlier this week when shining beacon of corporate responsibility Uber insisted its users had agreed not to sue the company somewhere in its long list of lengthy legal locutions.
On Thursday, the US Second Court of Appeals decided [PDF] that when customers installed Uber's ride-hailing app and agreed to the terms and conditions – even though virtually none of them actually read the details – they were obliged to go through arbitration if they had a dispute with the company.
The case was very closely watched by technology companies for obvious reasons – if the court ruled differently it could have opened them up to a wave of potential liability and public scrutiny.
As it stands, the arbitration requirement will hold: a situation that enables many companies to keep embarrassing cock-ups and business practices under wraps since unhappy consumers are obliged to go through the process privately and details are not made public.
Although the decision may seem logical in a legal sense, there was some question over whether the terms and conditions approach would hold. A district court in New York found that Uber's terms of service were difficult to access (they weren't included in the actual app) and so couldn't be enforced since people didn't know what they had agreed to. Uber appealed, and this week's decision overturned that lower court's ruling.
Appeal Judge Denny Chin concluded that the district court had erred "in concluding that the notice of the Terms of Service was not reasonably conspicuous," adding: "While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes." Uber called the decision "commonsense."
I wish I were a Spencer Meyer weiner
The case started when one Uber customer, Spencer Meyer, sued over what he claimed was price fixing. Before the case could get to that accusation, however, the question of whether Meyer has the right to sue took over.
Despite this particular decision, there is a growing movement toward making the law reflect reality more closely: customers almost never reads the terms of conditions which are often very lengthy and legalistic and which many companies, especially app manufacturers, allow to be "agreed to" with a single tap or click.
The ludicrousness of the situation was recently highlighted when Brit public Wi-Fi provider Purple inserted a "community service clause" into its terms and conditions that required users to carry out 1,000 hours of community service in exchange for free access. The task list included cleaning toilets, painting snail shells and picking up dog turds.
It was a stunt pulled as part of the outfit's overhaul of its practices to fall in line with the UK's latest data protection legislation. Its CEO Gavin Wheeldon pointed out at the time: "Users need to read terms when they sign up to access a network. What are they agreeing to, how much data are they sharing, and what license are they giving to providers? Our experiment shows it's all too easy to tick a box and consent to something unfair."
In a related case, former Uber CEO Travis Kalanick responded to a lawsuit brought by one of the company's investors, claiming the legal action was nothing more than a personal attack. Kalanick argued that – guess what – the issue should be settled by arbitration rather than through the law courts.
The investor, Benchmark Capital, has one seat on the Uber board and alleges Kalanick defrauded them and other by keeping the app maker's numerous dodgy business practices secret. Benchmark wants Kalanick booted off the board, and the three board seats he created to secure his position either opened up or removed altogether. ®