New York Eases Its Stance on Clickwrap Arbitration Agreements
For many years, New York has been viewed as a relatively cautious jurisdiction when it comes to the enforcement of arbitration agreements—especially those embedded in digital “clickwrap” formats. These agreements, which typically require users to click “I agree” to terms and conditions before proceeding with an online transaction or service, have long existed in a legal gray area, subject to scrutiny about whether meaningful consent was ever given.
But in a recent opinion issued just before Thanksgiving, the New York Court of Appeals appeared to soften the state's historically restrictive approach. In Wu v. Uber Technologies, Inc., the court held that clickwrap arbitration agreements are enforceable under a preponderance of the evidence standard, marking a meaningful departure from the previously applied, more stringent evidentiary burden.
To read the decision, click here.
The Case: Wu v. Uber Technologies, Inc.
The dispute arose when the plaintiff, Wu, challenged the enforceability of an arbitration clause embedded in Uber’s online user agreement. Like many technology companies, Uber uses a clickwrap format—requiring users to affirmatively accept terms of service before creating or updating an account. Those terms included a mandatory arbitration clause and a waiver of the right to pursue class actions.
Wu argued that the arbitration agreement was invalid, in part because the method of assent was not “clear, explicit and unequivocal,” a heightened evidentiary standard previously associated with arbitration enforcement in New York.
The lower courts were divided on the issue, reflecting broader judicial uncertainty about the enforceability of digital contracts. The Court of Appeals, however, took the opportunity to clarify the standard and bring New York law more in line with federal arbitration principles.
The Shift: From “Clear and Unequivocal” to Preponderance
In its decision, the court rejected the use of the heightened “clear, explicit and unequivocal” standard as the benchmark for determining whether an arbitration agreement exists. Instead, the court adopted the “preponderance of the evidence” standard—consistent with federal case law and the general evidentiary standard for civil matters.
The court cited language from the U.S. Court of Appeals for the Second Circuit in Progressive Casualty Ins. Co. v. C.A. Reaseguradora Nacional de Venezuela, noting:
“Accordingly, in determining whether the parties have agreed to arbitrate, we apply the ordinary preponderance of the evidence standard.”
This change lowers the burden on parties seeking to compel arbitration and provides a clearer pathway for enforcing online arbitration agreements, particularly those that are common in app-based and e-commerce platforms.
What This Means for Digital Arbitration Agreements
While the ruling in Wu does not give unchecked license to enforce every clickwrap agreement, it does bring greater predictability to the enforcement landscape. Companies using digital onboarding platforms now have firmer ground under New York law when seeking to compel arbitration based on user assent.
The decision also reflects a growing judicial acknowledgment of the realities of modern commerce. Millions of transactions and service agreements occur online each day, and courts are increasingly recognizing that the traditional contract formation framework—based on paper signatures and ink—is often impractical in the digital environment.
That said, enforceability still depends on the quality of the assent process. Agreements may still be challenged if:
The terms are buried or difficult to find
The user was not required to take a clear affirmative action
The interface was confusing or misleading
The agreement includes terms that are unconscionable or one-sided
Context: The Broader Legal Trend
The Wu decision aligns New York more closely with federal jurisprudence and with other jurisdictions that have adopted a more practical view of digital contract formation. Courts in California, Florida, and Illinois, among others, have repeatedly upheld clickwrap agreements when the assent process is clear and the user is given reasonable notice of the terms.
By adopting a preponderance standard, New York is signaling that it does not intend to create unnecessary hurdles for the enforcement of arbitration provisions—at least where users are presented with a reasonably conspicuous and clear method of acceptance.
This trend also reflects a broader judicial endorsement of arbitration as a viable and efficient alternative to court proceedings. The U.S. Supreme Court has consistently reinforced the enforceability of arbitration agreements under the Federal Arbitration Act, even when state courts have been more cautious.
What Businesses Should Know
For businesses operating in New York or contracting with users there, Wu is an important development. Key takeaways include:
Revisit digital contracting platforms. Ensure that terms of service, including arbitration clauses, are clearly displayed and require active user consent.
Use unambiguous language. Clarity is key. Vague or complex language may still give rise to enforceability challenges.
Maintain records. Documentation showing when and how the user agreed to terms can be crucial in enforcement proceedings.
Monitor interface changes. If a platform is redesigned, or if terms are updated, the consent process should be reviewed to ensure it still meets legal standards.
What Consumers Should Be Aware Of
For consumers, Wu is a reminder that clicking "I agree" may carry significant legal consequences. That single click can bind a user to arbitration, class action waivers, choice-of-law provisions, and more.
While courts will scrutinize the fairness and visibility of such agreements, the presumption now favors enforcement when the process is reasonably transparent. This makes it all the more important for consumers to:
Take time to read the terms before accepting
Understand that arbitration agreements often limit access to courts and collective remedies
Seek legal advice if uncertain about the meaning or impact of online agreements
Not Carte Blanche—But a Noteworthy Shift
The Wu decision does not mean that all clickwrap arbitration clauses are now automatically enforceable in New York. Courts will continue to examine context, clarity, and consent on a case-by-case basis. However, the move away from the elevated “clear and unequivocal” standard provides greater clarity and alignment with national trends.
This shift also reflects a broader recognition that arbitration clauses, when presented fairly, can be an efficient and appropriate dispute resolution mechanism—even in consumer-facing transactions.
Unlocking Clarity in Clickwrap and Arbitration Enforcement
For legal professionals, business operators, and consumers alike, Wu represents a notable moment in the evolving dialogue around digital contract enforcement. As courts adapt to the realities of online transactions, the emphasis will continue to be on clear terms, reasonable notice, and accessible consent mechanisms.
At Nationwide ADR, arbitration is not just a practice area—it’s a strategic discipline. With deep experience handling disputes involving consumer contracts, digital platforms, and clickwrap enforcement, Nationwide ADR offers insight, neutrality, and guidance in navigating arbitration from both sides of the table.
Whether the issue involves contract formation, procedural complexity, or nuanced statutory frameworks, the mission remains: Unlocking Solutions for Demanding Cases.
To explore arbitration services or learn more about ADR options tailored to digital contracts and evolving enforcement standards, visit NationwideADR.com.