Sweating The Details: Court Analyzes User Interface To Uphold Online Arbitration Clause

Online service providers typically seek to mitigate risk by including arbitration clauses in their user agreements. In order for such agreements to be effective, however, they must be implemented properly. Babcock vs. Neutron Holdings, Inc., a recent Southern District of Florida case involving a plaintiff who was injured while riding one of the defendant's Lime e-scooters, illustrates that courts will closely scrutinize the details of how an online contract is presented to users to determine whether or not it is enforceable.

As we have noted, online contracts are more likely to be enforced where (1) the terms are conspicuously displayed so that users have notice of them, and (2) users are required to take some affirmative action (e.g., checking a box or clicking a button) to indicate acceptance of the terms.