Leonard S. Slavit | December 5, 2024

In a recent ruling, the New York State Court of Appeals has ruled in favor of Uber in a lawsuit revolving around its ‘clickwrap’ terms of service. As a result, the plaintiff’s lawsuit was dismissed and she will be forced to have her case decided by an arbitrator, rather than by a jury. The ruling leaves unanswered some significant legal issues that may still need to be hammered out.

What Happened in This Lawsuit?

The plaintiff in the lawsuit was an Uber customer who first signed a ‘clickwrap’ contract as part of the process of signing up for the app, in the form of its 2016 terms of service. In November 2020, she was being driven by an Uber driver who dropped her off in the middle of traffic in New York City, causing her to get hit by a car. Subsequently, she agreed to Uber’s updated terms of service in 2021, which contained a clause that Uber contends requires her claim for personal injuries be handled in private arbitration.

What Was the Legal Issue Being Decided?

The primary legal issue decided is whether the 2021 clickwrap contract was legally binding on the plaintiff, which would force her to adjudicate her claims in private arbitration. She tried to argue that the contract was worded in a misleading manner and that it was impossible for an ordinary customer to understand its terms. Uber, meanwhile, argued that it was a perfectly legitimate contract, and that she can still be bound to its terms even if she did not understand them.

What Did the Court Rule?

In a 5-2 ruling, the Court of Appeals found that the terms of the contract were legally binding, and she would need to go to private arbitration. The opinion noted that people have signed contracts they did not fully understand or look over since time immemorial, and they have generally been found to be enforceable regardless. Moreover, the court ruled that the plaintiff could not contest the enforceability of the arbitration clause in court. The case is Wu v Uber Tech., Inc., decided on November 25, 2024.

Why Does This Matter?

The court’s decision is important because it emphasizes the fact that these ‘clickwrap’ contracts can be legally binding, even if people do not tend to read them. The decision also highlights the strong public policy in favor of enforcing mandatory arbitration clauses. In some cases, as this one, it also includes retroactive terms that can try to shield them from liability. On the other hand, while the injured person’s monetary recovery might be smaller from an arbitrator rather than a jury, they would most likely receive their compensation quicker through arbitration than through a lawsuit, which we find many of our clients appreciate.

If you or someone you love has been injured due to someone else’s negligence, seeking the advice from an attorney experienced in personal injury law who will help assure you get the compensation you deserve. The lawyers at Levine and Slavit, PLLC, assist clients in New York City and Long Island in obtaining the damages they need to cope with being the victim of negligence. For more information or to schedule a consultation with our New York personal injury lawyers, call (212) 687 2777 or fill out our contact form.