The opinion is expected to have far-ranging effects in what was a previously insufficiently-explored area of contract formation and consumer rights in the new high-tech era
On January 4, 2021, the Massachusetts Supreme Judicial Court issued an opinion in the high-profile Massachusetts Uber consumer contracts case about how contracts get formed online and what constitutes adequate communication/imposition of strict contract terms. The court ruled that the same two-part test governs agreements consummated over computer or mobile device as for any other type of contract: reasonable notice of contract terms and clear manifestation of assent to those terms. Extending that into the instant consumer case against Uber, the Court held that Uber’s frictionless “one-button” imposition of terms that multiply abridge consumer’s rights is improper.
This case arose after Christopher Kauders, a blind man who travels with a guide dog, was denied transportation by several Uber drivers. He filed a discrimination action in state court but Uber successfully compelled his claims into arbitration. The arbitrator then ruled that though he had suffered discrimination, Uber was not responsible for the actions of its drivers (another term customers “agree” to when they sign up for Uber’s services). By the time Uber moved to confirm the award, the First Circuit had decided Cullinane v. Uber Technologies, 893 F.3d 53 (1st Cir. 2018), which ruled that Uber’s registration process did not form an enforceable contract under Massachusetts law based on lack of notice. Mr. Kauders asked the trial court to reconsider its earlier order compelling arbitration based on Cullinane and the court agreed, resulting in this appeal.
Congratulations to all involved in securing this important victory, including Jeff White of AAJ and Thomas Murphy of the Massachusetts Academy of Trial Attorneys, who also submitted an excellent amicus brief.