Registration for an Application Is Tantamount to a Binding Contract

The New York Circuit Court of Appeals ruled recently that when a new user confirms the “terms of service” and “privacy policy” on an application’s registration screen, even without perusing the legal documents provided through these links, such approval suffices to raise the user’s legal engagement with the company to the standing of a binding contract. This ruling overturned an earlier ruling that a binding contract has not arisen between the parties.

This issue was tested when the Circuit Court of Appeals rejected the plea of a user of the Uber application. That user, Spencer Meyer, objected to the provisions and the arbitration stipulation that is “one click away” in the application’s terms of service, although he had marked his agreement when he first opted to register for the Uber application.

As stated, the Circuit Court of Appeals reached a different conclusion than that of the lower court that deliberated the case. The lower court believed that some ambiguity exists in the way the link to the terms of service in the Uber application is displayed, as it results in users not being aware they are engaging in a binding contract.

In overturning the ruling, the Circuit Court of Appeals said that even if Uber used a smaller font for the links to its “terms of service” and “privacy policy,” it did so in a way that was conspicuous enough for typical smartphone users to find them.

The Court also said that while it may be the case that many users of the application will not bother to read these documents, that is the choice the user makes.

This ruling is added to a series of various earlier rulings in this regard, and signals the continuing trend toward strengthening the legal validity of applications’ terms of service and privacy. It is reasonable to assume that this ruling will help boost users’ awareness of legal implications involved in registering for applications.