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Stack overflow’s TOS has a binding arbitration clause, [1] despite overwhelming user feedback to the contrary. [2] Y Combinator’s TOS has an arbitration clause

Stack overflow’s TOS has a binding arbitration clause, [1] despite overwhelming user feedback to the contrary. [2] Y Combinator’s TOS has an arbitration clause. [3] If you’ve created an account on HN, you’ve agreed to arbitration. [1] https://stackoverflow.com/legal/terms-of-service/public https://stackoverflow.com/legal/terms-of-service/public [2] https://meta.stackexchange.com/a/309756 https://meta.stackexchange.com/a/309756 [3] https://www.ycombinator.com/legal/ https://www.ycombinator.com/legal/

deleted 7y ago
[deleted]
antonzabirko 7y ago
ianal and all that - but these tos are dubious. They can be ruled unconscionable, not enforceable because they are easy to miss, and being overly favored to tho company. Ignore the arbitration clauses and talk to your lawyer.
- lisper 7y ago
  IANAL either but I do know a little about contract law because I was involved in a legal dispute involving contract law [1]. One of the fundamental principles of contract law is that for a contract to be legally binding there has to have been a "meeting of the minds" [2], i.e. the two parties have to actually have agreed to the terms of the contract. Merely publishing terms of service does not constitute a legally binding contract. Think about it: I could put ToS on my site that say, "By using this site you agree to pay me $1M." If I were to try to enforce that I guarantee you I would not prevail. Binding arbitration clauses in ToS are there primarily to make people think that they can't sue. [1] https://blog.rongarret.info/2011/12/cosmo-and-me-part-3-how-wall-street.html https://blog.rongarret.info/2011/12/cosmo-and-me-part-3-how-... [2] https://contract-law.laws.com/contract-law/meeting-of-the-minds https://contract-law.laws.com/contract-law/meeting-of-the-mi...
  - nabla9 7y ago
    The US has binding consumer arbitration. In the US those are not empty clauses, despite the fact that they break many legal principles https://en.wikipedia.org/wiki/AT%26T_Mobility_LLC_v._Concepcion https://en.wikipedia.org/wiki/AT%26T_Mobility_LLC_v._Concepc...
    - jellicle 7y ago
      Nabla is correct and the prior two commenters are wrong. Although many people think that arbitration clauses are unenforceable, in fact they are completely and totally enforceable under US law in every state. When you take your [service] to court, it will get kicked out immediately and your dispute will be adjudicated by an arbitrator usually chosen by and paid by the [service], and that will be the extent of the justice available to you. https://en.wikipedia.org/wiki/Federal_Arbitration_Act https://en.wikipedia.org/wiki/Federal_Arbitration_Act
      - lisper 7y ago
        I didn't say that arbitration clauses are unenforceable. They are enforceable. In fact, one of the references I cited explicitly spelled that out in painful personal detail. What I said was that merely publishing ToS on your web site does not constitute a binding contract. If you don't have a binding contract, then nothing in the ToS is enforceable.
      - omginternets 7y ago
        Hang on, I think y'all are talking past each other. The claim (as I've understood it) is: 1. Binding Arbitration is enforceable. 2. Binding Arbitration clauses fall under contract law. 3. By virtue of point 2, Binding Arbitration clauses require a Meeting of the Minds in order to be valid and enforceable. I think you're attacking a straw man.
        jellicle 7y ago
        We started off the thread with "these TOS are dubious, they can be ruled unconscionable..." They aren't dubious, they aren't ruled unconscionable. If you sign up for some service and agree to the terms of service that include arbitration, you're going to arbitration and nothing else. Yes, your click on "I agree to the TOS" is binding on you, no, no one cares that you were closing your eyes or crossing your fingers or whatever. Your use of the service shows your agreement.
- piker 7y ago
  IAAL and banking on a court voiding a contract provision is tenuous. "adhesion contracts" in the form of website TOS, click-throughs, etc. are upheld by courts.
  - caro_douglos 7y ago
    Are there any firms you can recommend that specialize in fighting TOS? Is it similar to criminal defense or PI where an attorney seeks out the case and will then take a large fee if they win?
    - KarlKemp 7y ago
      In Europe, or at least Germany, there are consumer protection initiatives that have standing to sue in such cases. They sometimes take up individuals’ cases, and even take companies to court preemptively for onerous ToS. Mobile phone companies have been hit by such lawsuits quite a few times. Similarly, there’s an environmental group that has forced several large German cities to implement (partial) bans of diesel cars based on EU pollution limits being repeatedly being broken. The concept of class-action lawsuits isn’t as relevant here, and there is no such concept as “punitive damages”. The best you can hope for is a court order granting you whatever Igor is in dispute plus any actual damages. Lawyers’ fees and court costs are also awarded to the winner by default, with a sliding scale for such fees based on the value in dispute. You can sometimes find a lawyer who will take your case if they are optimistic as to your chances, but of the cases I know, this mostly happens when the lawyer also has some ideological interest in it (say privacy or labor law). There is insurance you can buy that will cover legal costs, but you will need to convince them of your chances in any litigation that you want to initiate (as opposed to being sued). There are also a number of non-profits that offer legal services for specific issues, typically in exchange for yearly fees: unions, tenants’ organisation, and even dog owners’ or RC airplane clubs.
- t0mas88 7y ago
  This is very region/system specific, the US and UK adhere more strictly to what was written than most of continental Europe. In Europe there is more weight on "reasonable" interpretation and consumer protection compared to the literal agreement. That makes things more vague, but the result is also that going to court with the claim "the terms are too unfavorable to me and I was forced to click OK" is accepted by the courts as a reason to ignore the TOS. So a mandatory arbitration clause can be written here, but you would fail to stop your customer from going to court if they disagree with the arbitration outcome. Similar for things like excluding warranty, you cannot legally decrease consumer product warranty below 2 years in Europe. You would loose that case, because the courts have ruled that less then 2 years (or less than the reasonably expected economic life of the product if that's longer) is unfavorable to the consumer and thus null.
alteria 7y ago
It seems like every mundane service these days either has added binding arbitration, or requires it on sign up. Anyone from Pornhub/various adult sites to Blue Apron all want you to waive away your rights. Even more troubling is binding-arbitration and class-action waivers for employment. They suppress cases of systematic mistreatment and allow issues to be swept under the rug, even more so than they are already.
- PaulHoule 7y ago
  If you running a "real" business frequently you have to get customers to sign waivers to get insurance. For instance, if you want to get insurance for a riding academy, they will want you to get all your riders to sign a contract that disclaims all liability, put up a big ugly sign about it, all that.
  - pmiller2 7y ago
    That's a much different and much narrower instance of giving up one's rights. In the case of the riding academy, the consumer can still go to court and argue that an injury was caused by negligence on the part of the business and get the waiver invalidated. Taking a company to court over a contract dispute when there's an arbitration clause involved is most likely to get the case dismissed in favor of arbitration. Arbitrators have no real requirement to actually follow any laws, and rarely do they allow any appeal, so you're essentially at the whim of the arbitrator.
nabla9 7y ago
The US stands alone in consumer arbitration. In most countries consumer arbitration is either heavily regulated, or non binding. In EU pre-dispute binding consumer arbitration clauses are considered unfair terms. American Exceptionalism in Consumer Arbitration https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2265556 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2265556
- marcus_holmes 7y ago
  Thanks for this. I'm curious: I live in Germany. Is YC/HN's arbitration clause enforceable against me? Can I take them to court in Germany?
  - tjpnz 7y ago
    Not a lawyer but I suspect it would depend on the country. As an example there are clauses written into ToS which don't allow refunds on digital purchases. These work fine in the US but are illegal in countries with stronger consumer protections like Australia. US companies do still have to obey local laws - at least when it comes to the sale of faulty goods.
  - KarlKemp 7y ago
    It’s complicated... I would suspect (not a lawyer) that the main issue will be jurisdiction. As a consumer in the EU, jurisdiction in matters with commercial entities is the consumer’s place of residence. But HN/YC isn’t in the EU, and I don’t think there are any legal agreements b/w the EU and USA that are relevant here. Free trade agreements tend to include such issues, but TTIP’s well-known fate means this is left to the parties to specify in any contract. Then, there’s a difference b/w HN and YC. HN’s relationship to users is that of a commercial entity to consumers. But YC investing in your startup isn’t. Consumer protections would not apply even if YC were in the EU. To summarize: yes, the arbitration clause, at least of YC, would apply to the same extend as if you were a US citizen.
  - wsy 7y ago
    Also not a lawyer. To be covered by Germany's consumer protection law, you need show that you are end consumer of a commercial product or service. I don't see how that would apply to YC/HN. If you could pull that part off, I think you could take YC to court in Germany, and even achieve a favorable judgement. However, I don't see any way how you could enforce the outcome, except if YC has assets in Germany.
admax88q 7y ago
> If you’ve created an account on HN, you’ve agreed to arbitration. Thats is not true. I just tried creating an account, there isnt even even a mention of any terms of service.
- surround 7y ago
  The “Legal” link at the bottom of the website points to Y Combinator’s TOS. > Welcome to the Y Combinator website (including all subdomains, the “Site”) > This Site provides, among other things... forums for discussions about topics relevant to startups > THESE TERMS OF USE CONTAIN AN ARBITRATION AGREEMENT, WHICH WILL, WITH LIMITED EXCEPTION, REQUIRE YOU TO SUBMIT CLAIMS YOU HAVE AGAINST US TO BINDING AND FINAL ARBITRATION. It’s odd that there isn’t any mention of the TOS upon registration. Does this mean they could potentially be non-enforceable?
  - admax88q 7y ago
    I highly doubt its enforceable. I can't try to enforce a ToS against you if I never even asked you to agree to it, or even _informed_ you that such a ToS exist. EDIT: Did some random googling about enforceability of terms of service. In a case discussed here[1] the ToS were deemed unenforceable based upon in part the lack of assent to the terms. > [A]cceptance need not be express, but where it is not, there must be evidence that the offeree knew or should have known of the terms and understood that acceptance of the benefit would be construed by the offeror as an agreement to be bound. . .That is not the case here. The plaintiffs were never put on inquiry notice of the arbitration provision, and their continued credit-card payments, which were auto-debited from their credit cards, were too passive for any reasonable fact-finder to conclude that they manifested a subjective understanding of the existence of the arbitration and other emailed provisions and an intent to be bound by them in exchange for the continued benefits [membership] offered. In the HN case I would argue that there is no evidence that anyone creating a HN account knows or can be expected to know that there are ToS related to that account creation that they are agreeing to, as there is no mention of them in the complete registration process. [1] - https://www.forbes.com/sites/oliverherzfeld/2013/01/22/are-website-terms-of-use-enforceable/#227f0018f4a7 https://www.forbes.com/sites/oliverherzfeld/2013/01/22/are-w...

deleted 7y ago

[deleted]

antonzabirko 7y ago

ianal and all that - but these tos are dubious. They can be ruled unconscionable, not enforceable because they are easy to miss, and being overly favored to tho company. Ignore the arbitration clauses and talk to your lawyer.

lisper 7y ago
IANAL either but I do know a little about contract law because I was involved in a legal dispute involving contract law [1]. One of the fundamental principles of contract law is that for a contract to be legally binding there has to have been a "meeting of the minds" [2], i.e. the two parties have to actually have agreed to the terms of the contract. Merely publishing terms of service does not constitute a legally binding contract. Think about it: I could put ToS on my site that say, "By using this site you agree to pay me $1M." If I were to try to enforce that I guarantee you I would not prevail. Binding arbitration clauses in ToS are there primarily to make people think that they can't sue. [1] https://blog.rongarret.info/2011/12/cosmo-and-me-part-3-how-wall-street.html https://blog.rongarret.info/2011/12/cosmo-and-me-part-3-how-... [2] https://contract-law.laws.com/contract-law/meeting-of-the-minds https://contract-law.laws.com/contract-law/meeting-of-the-mi...
- nabla9 7y ago
  The US has binding consumer arbitration. In the US those are not empty clauses, despite the fact that they break many legal principles https://en.wikipedia.org/wiki/AT%26T_Mobility_LLC_v._Concepcion https://en.wikipedia.org/wiki/AT%26T_Mobility_LLC_v._Concepc...
  - jellicle 7y ago
    Nabla is correct and the prior two commenters are wrong. Although many people think that arbitration clauses are unenforceable, in fact they are completely and totally enforceable under US law in every state. When you take your [service] to court, it will get kicked out immediately and your dispute will be adjudicated by an arbitrator usually chosen by and paid by the [service], and that will be the extent of the justice available to you. https://en.wikipedia.org/wiki/Federal_Arbitration_Act https://en.wikipedia.org/wiki/Federal_Arbitration_Act
    - lisper 7y ago
      I didn't say that arbitration clauses are unenforceable. They are enforceable. In fact, one of the references I cited explicitly spelled that out in painful personal detail. What I said was that merely publishing ToS on your web site does not constitute a binding contract. If you don't have a binding contract, then nothing in the ToS is enforceable.
    - omginternets 7y ago
      Hang on, I think y'all are talking past each other. The claim (as I've understood it) is: 1. Binding Arbitration is enforceable. 2. Binding Arbitration clauses fall under contract law. 3. By virtue of point 2, Binding Arbitration clauses require a Meeting of the Minds in order to be valid and enforceable. I think you're attacking a straw man.
      - jellicle 7y ago
        We started off the thread with "these TOS are dubious, they can be ruled unconscionable..." They aren't dubious, they aren't ruled unconscionable. If you sign up for some service and agree to the terms of service that include arbitration, you're going to arbitration and nothing else. Yes, your click on "I agree to the TOS" is binding on you, no, no one cares that you were closing your eyes or crossing your fingers or whatever. Your use of the service shows your agreement.
piker 7y ago
IAAL and banking on a court voiding a contract provision is tenuous. "adhesion contracts" in the form of website TOS, click-throughs, etc. are upheld by courts.
- caro_douglos 7y ago
  Are there any firms you can recommend that specialize in fighting TOS? Is it similar to criminal defense or PI where an attorney seeks out the case and will then take a large fee if they win?
  - KarlKemp 7y ago
    In Europe, or at least Germany, there are consumer protection initiatives that have standing to sue in such cases. They sometimes take up individuals’ cases, and even take companies to court preemptively for onerous ToS. Mobile phone companies have been hit by such lawsuits quite a few times. Similarly, there’s an environmental group that has forced several large German cities to implement (partial) bans of diesel cars based on EU pollution limits being repeatedly being broken. The concept of class-action lawsuits isn’t as relevant here, and there is no such concept as “punitive damages”. The best you can hope for is a court order granting you whatever Igor is in dispute plus any actual damages. Lawyers’ fees and court costs are also awarded to the winner by default, with a sliding scale for such fees based on the value in dispute. You can sometimes find a lawyer who will take your case if they are optimistic as to your chances, but of the cases I know, this mostly happens when the lawyer also has some ideological interest in it (say privacy or labor law). There is insurance you can buy that will cover legal costs, but you will need to convince them of your chances in any litigation that you want to initiate (as opposed to being sued). There are also a number of non-profits that offer legal services for specific issues, typically in exchange for yearly fees: unions, tenants’ organisation, and even dog owners’ or RC airplane clubs.
t0mas88 7y ago
This is very region/system specific, the US and UK adhere more strictly to what was written than most of continental Europe. In Europe there is more weight on "reasonable" interpretation and consumer protection compared to the literal agreement. That makes things more vague, but the result is also that going to court with the claim "the terms are too unfavorable to me and I was forced to click OK" is accepted by the courts as a reason to ignore the TOS. So a mandatory arbitration clause can be written here, but you would fail to stop your customer from going to court if they disagree with the arbitration outcome. Similar for things like excluding warranty, you cannot legally decrease consumer product warranty below 2 years in Europe. You would loose that case, because the courts have ruled that less then 2 years (or less than the reasonably expected economic life of the product if that's longer) is unfavorable to the consumer and thus null.

alteria 7y ago

It seems like every mundane service these days either has added binding arbitration, or requires it on sign up. Anyone from Pornhub/various adult sites to Blue Apron all want you to waive away your rights. Even more troubling is binding-arbitration and class-action waivers for employment. They suppress cases of systematic mistreatment and allow issues to be swept under the rug, even more so than they are already.

PaulHoule 7y ago
If you running a "real" business frequently you have to get customers to sign waivers to get insurance. For instance, if you want to get insurance for a riding academy, they will want you to get all your riders to sign a contract that disclaims all liability, put up a big ugly sign about it, all that.
- pmiller2 7y ago
  That's a much different and much narrower instance of giving up one's rights. In the case of the riding academy, the consumer can still go to court and argue that an injury was caused by negligence on the part of the business and get the waiver invalidated. Taking a company to court over a contract dispute when there's an arbitration clause involved is most likely to get the case dismissed in favor of arbitration. Arbitrators have no real requirement to actually follow any laws, and rarely do they allow any appeal, so you're essentially at the whim of the arbitrator.

nabla9 7y ago

The US stands alone in consumer arbitration. In most countries consumer arbitration is either heavily regulated, or non binding. In EU pre-dispute binding consumer arbitration clauses are considered unfair terms. American Exceptionalism in Consumer Arbitration https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2265556 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2265556

marcus_holmes 7y ago
Thanks for this. I'm curious: I live in Germany. Is YC/HN's arbitration clause enforceable against me? Can I take them to court in Germany?
- tjpnz 7y ago
  Not a lawyer but I suspect it would depend on the country. As an example there are clauses written into ToS which don't allow refunds on digital purchases. These work fine in the US but are illegal in countries with stronger consumer protections like Australia. US companies do still have to obey local laws - at least when it comes to the sale of faulty goods.
- KarlKemp 7y ago
  It’s complicated... I would suspect (not a lawyer) that the main issue will be jurisdiction. As a consumer in the EU, jurisdiction in matters with commercial entities is the consumer’s place of residence. But HN/YC isn’t in the EU, and I don’t think there are any legal agreements b/w the EU and USA that are relevant here. Free trade agreements tend to include such issues, but TTIP’s well-known fate means this is left to the parties to specify in any contract. Then, there’s a difference b/w HN and YC. HN’s relationship to users is that of a commercial entity to consumers. But YC investing in your startup isn’t. Consumer protections would not apply even if YC were in the EU. To summarize: yes, the arbitration clause, at least of YC, would apply to the same extend as if you were a US citizen.
- wsy 7y ago
  Also not a lawyer. To be covered by Germany's consumer protection law, you need show that you are end consumer of a commercial product or service. I don't see how that would apply to YC/HN. If you could pull that part off, I think you could take YC to court in Germany, and even achieve a favorable judgement. However, I don't see any way how you could enforce the outcome, except if YC has assets in Germany.

admax88q 7y ago

> If you’ve created an account on HN, you’ve agreed to arbitration. Thats is not true. I just tried creating an account, there isnt even even a mention of any terms of service.

surround 7y ago
The “Legal” link at the bottom of the website points to Y Combinator’s TOS. > Welcome to the Y Combinator website (including all subdomains, the “Site”) > This Site provides, among other things... forums for discussions about topics relevant to startups > THESE TERMS OF USE CONTAIN AN ARBITRATION AGREEMENT, WHICH WILL, WITH LIMITED EXCEPTION, REQUIRE YOU TO SUBMIT CLAIMS YOU HAVE AGAINST US TO BINDING AND FINAL ARBITRATION. It’s odd that there isn’t any mention of the TOS upon registration. Does this mean they could potentially be non-enforceable?
- admax88q 7y ago
  I highly doubt its enforceable. I can't try to enforce a ToS against you if I never even asked you to agree to it, or even _informed_ you that such a ToS exist. EDIT: Did some random googling about enforceability of terms of service. In a case discussed here[1] the ToS were deemed unenforceable based upon in part the lack of assent to the terms. > [A]cceptance need not be express, but where it is not, there must be evidence that the offeree knew or should have known of the terms and understood that acceptance of the benefit would be construed by the offeror as an agreement to be bound. . .That is not the case here. The plaintiffs were never put on inquiry notice of the arbitration provision, and their continued credit-card payments, which were auto-debited from their credit cards, were too passive for any reasonable fact-finder to conclude that they manifested a subjective understanding of the existence of the arbitration and other emailed provisions and an intent to be bound by them in exchange for the continued benefits [membership] offered. In the HN case I would argue that there is no evidence that anyone creating a HN account knows or can be expected to know that there are ToS related to that account creation that they are agreeing to, as there is no mention of them in the complete registration process. [1] - https://www.forbes.com/sites/oliverherzfeld/2013/01/22/are-website-terms-of-use-enforceable/#227f0018f4a7 https://www.forbes.com/sites/oliverherzfeld/2013/01/22/are-w...