Yesterday the First Circuit weighed in on a hot topic – the enforceability of arbitration provisions in online contracts. In Cullinane, several plaintiffs brought a putative class action alleging that Uber had violated Massachusetts’ consumer protection statute by assessing certain fees. Uber filed a motion to compel arbitration under its Terms of Service, which contained an arbitration provision and class action waiver. After the district court granted the motion, the First Circuit reversed, finding the arbitration provision unenforceable because Uber did not make its Terms of Service sufficiently conspicuous when its customers created a ride-sharing account. Cullinane underscores the importance of obtaining customers’ affirmative consent to an online contract.
At the outset, the First Circuit acknowledged that the Federal Arbitration Action places arbitration provisions upon the same footing as other contract provisions. It also emphasized that arbitration is a matter of contract and that a valid contract must exist in order for the arbitration provision to be enforced. The