.

Defense Digest

Pennsylvania Superior Court Refuses to Enforce Online Binding Arbitration Agreement Located in Hyperlink

Defense Digest, Vol. 29, No. 3, September 2023

September 1, 2023

Key Points:

  • A consumer’s passive acceptance of online arbitration agreements will not be enforced.
  • A jury trial is a paramount constitutional right requiring clear manifestations of any waiver.
  • The court issues strict standards in Pennsylvania to enforce an arbitration agreement.

In many claims with a binding arbitration agreement, enforcing the agreement to waive a jury trial is a relatively straightforward procedure. Online agreements in Pennsylvania now have an additional burden; there must be a clear and conspicuous waiver of the right to a jury trial showing acceptance by the consumer. The Pennsylvania Superior Court recently provided guidelines on what is considered an enforceable waiver of a jury trial.

In the case Chilutti vs. Uber Technologies, Inc., 2023 WL 4611931 (Pa. Super. July 19, 2023), Shannon Chilutti requested an Uber drive her from a medical appointment. The Uber driver secured her wheelchair in his van, but did not provide her with a seatbelt that she requested. The driver allegedly made an aggressive turn, and Mrs. Chilutti fell out of her wheelchair and was injured. Mr. and Mrs. Chilutti then filed suit against Uber. The company petitioned to compel arbitration, arguing that the terms and conditions of the Uber application website required that the plaintiffs proceed to a mandatory arbitration. The trial court granted Uber’s petition to compel arbitration. The Superior Court of Pennsylvania then reversed and ordered the case remanded to a jury trial.

The Superior Court addressed a decision of the United States Court of Appeals for the Ninth Circuit where it described two different types of internet contracts. The “clickwrap” contract is when the terms of the contract appear on a pop-up screen and the consumer must explicitly agree to the terms by checking a box before proceeding on the website. Courts generally find these contracts enforceable because the consumer received and acknowledged notice of the terms of the contract.

The “browsewrap” contract is one in which the terms of the contract are not disclosed until the consumer clicks on a hyperlink. The consumer can continue on the website without clicking and opening the hyperlink. Courts are more reluctant to enforce these contracts because the terms of the contract may not have been clear or even read by the consumer.

The Superior Court stated it was clear the Uber agreements were “browsewrap” agreements. The plaintiffs were not aware of the terms of the contract nor were they aware that, by continuing in the Uber website, they were bound by the contract. The arbitration agreement was found in a hyperlink for “terms and conditions” when the plaintiffs registered for the ridesharing service on the internet. The plaintiffs admitted they never read those provisions and did not dispute the terms were available if they followed the hyperlink. They completed their registration process without accessing the terms and conditions.

Several reasons were identified why Uber’s website and application did not set forth reasonable and conspicuous notice of the contract. When Mrs. Chilutti registered for an Uber ride through the company’s website, the terms and conditions were “encapsulated in tiny, blue font at the very bottom of a cluttered webpage. The relevant text was not underlined or capitalized.” When Mr. Chilutti used the Uber app on his phone, the terms and conditions were in a small font and not underlined or capitalized.

The Superior Court emphasized that since 1847 the Pennsylvania Supreme Court has safeguarded the Seventh Amendment of the Constitution and that the right to a jury trial should be afforded the greatest protection in the courts. The court stated that a “stricter burden of proof is necessary to demonstrate a party’s unambiguous manifestation of assent to arbitration.” Previous standards articulated by the Ninth Circuit Court of Appeals were reviewed and found insufficient to protect this fundamental right.

In Pennsylvania, the Superior Court held that an unambiguous manifestation of assent to arbitration will be required and is accomplished by: 

  1. explicitly stating on the registration websites and application screens that a consumer is waiving a right to a jury trial when they agree to the company’s ‘terms and conditions,’ and the registration process cannot be completed until the consumer is fully informed of that waiver; and 
  2. when the agreements are available for viewing after a user has clicked on the hyperlink, the waiver should not be hidden in the ‘terms and conditions’ provisions but should appear at the top of the page in bold, capitalized text. In this case the plaintiffs were not informed in an explicit and upfront manner that they were giving up their constitutional right to seek damages through a jury trial proceeding.

Therefore, there was no valid agreement to arbitrate.

The Pennsylvania Superior Court made it very clear that it discourages online arbitration agreements. The Chilutti opinion sets the bar high to enforce such clauses. Much of the opinion discussed the need to preserve the consumer’s constitutional right to a jury trial. The court went through an analysis of what it described as a “copious usage of arbitration agreements in present day contracts” and noted that arbitration provisions have substantially weakened the right to a jury trial in Pennsylvania civil proceedings. The parties have unequal bargaining power, and such agreements will be closely scrutinized. Any fundamental consumer right addressed in an online contract will predictably need to comply with these guidelines to be enforced in Pennsylvania. 

 

 

Defense Digest, Vol. 29, No. 3, September 2023, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

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Thought Leadership

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Thought Leadership

The Enforceability of Online Arbitration Agreements Remains Unresolved in Pennsylvania, But the Pennsylvania Superior Court has Provided Substantive Guidance on the Issue

Key Points: The Pennsylvania Supreme Court confirms that an order compelling arbitration is not immediately appealable as collateral orders. The outcome of Chilutti II has generally left the substantive enforceability issues with browsewrap agreements unresolved in Pennsylvania. Until this issue is resolved by the Pennsylvania courts, companies operating in the Commonwealth should strive to ensure that their registration websites and/or application screens conspicuously present arbitration agreements in manners which ensure their users and consumers assent to the terms of the agreements by following the standards set forth in Chilutti I. Browsewrap agreements have been defined as agreements “‘in which a website offers terms that are disclosed only through a hyperlink and the user supposedly manifests assent to those terms simply by continuing to use the website,’ and typically do not require an electronic signature.” See, Cobb v. Tesla, Inc., 2026 WL 458470, at *1 n. 2 (Pa. Super. Feb. 18, 2026) (citation omitted). They are largely regarded as the “if you keep using this, you agree to everything buried in this link” terms embedded into almost every online agreement consumers and users sign before proceeding with purchases of goods and/or services. While consumers are generally aware of them, many almost never click on the link, nor read them in their entirety. This leaves many consumers and users ignorant of the terms and impact of such agreements. However, one’s ignorance of the otherwise neatly-tucked-away terms rarely renders them unenforceable. The issue of the enforceability of browsewrap agreements has been up for debate for some time in many jurisdictions, including Pennsylvania. Indeed, Pennsylvania had a brief grip on this issue for a period in time. Specifically, in 2023, an en banc Superior Court set forth heightened standards for companies to meet in order to secure assent and enforce browsewrap arbitration agreements. See Chilutti v. Uber Techs., Inc., 300 A.3d 430 (Pa.Super. 2023) (en banc) (“Chilutti I”) Chilutti I involved a husband and wife who sued Uber and its subsidiaries after the wife, a wheelchair bound passenger using Uber’s rideshare service, fell, struck her head, and lost consciousness due to her uber driver failing to provide a seatbelt and making an aggressive turn during the trip. The Chilutti’s filed a negligence lawsuit against Uber and its subsidiaries. In response, the defendants moved to compel arbitration, arguing that “the couple’s conduct on the company’s website and application — when they registered for the ridesharing service — signified that they agreed to be bound by the mandatory arbitration provision found in the hyperlinked terms and conditions.” The trial court granted the defendants’ petition and stayed the proceedings pending the results of arbitration, and the Chilutti’s appealed. On appeal, the Superior Court addressed two issues. First, it addressed the issue of whether it had jurisdiction to hear the appeal. A divided Superior Court determined that it did, with its basis for the holding being that the order from which the Chilutti’s appealed was a collateral order. Next, the Superior Court set out to address the merits of the Chilutti’s substantive claim. The Superior Court concluded that the parties lacked a valid agreement to arbitrate. Its rationale was that Uber’s website and application did not provide reasonably conspicuous notice of the terms to the Chiluttis. In reaching this decision, the en banc Superior Court held that browsewrap arbitration agreements are enforceable in Pennsylvania only if the registration website and application screens explicitly inform consumers that they are waiving the right to a jury trial, the registration process cannot be completed until the consumer is fully informed of this waiver, and, when the agreement is available via hyperlink, the waiver appears at the top of the first page of the terms in bold, capitalized text. Since the ruling, Pennsylvania courts have applied Chilutti I to determine if browsewrap agreements are enforceable.  For instance, the Allegheny County Court of Common Pleas invoked Chilutti I to reject an agreement that lacked an express jury-trial waiver on the assent screen.  See Miller v. Festival Fun Parks, LLC, 92 WDA 2025 (C.P. Alleg. Cnty. Mar. 24, 2025). Similarly, the Superior Court has held that notice which failed to explicitly state the consumer was waiving a jury-trial right did not “me[e]t the strict burden set forth by our en banc Court in Chilutti I.” Pierce v. FloatMe Corp., 348 A.3d 1077, 1088 (Pa. Super. 2025). While the issue of enforceability of browsewrap agreements appeared to have been resolved by Chilutti I, Pennsylvania courts’ grip on this issue has been slackened by the Pennsylvania Supreme Court’s January 21, 2026, opinion in Chilutti II. See Chilutti v. Uber Techs., Inc., 349 A.3d 826 (Pa. 2026) (“Chilutti II”). Therein, the Supreme Court did not address the merits of the Chiluttis’ substantive claim, but rather the issue of whether the Superior Court had appellate jurisdiction to immediately review the orders staying litigation pending arbitration. The Court ultimately vacated the en banc opinion on jurisdictional grounds, holding that the Superior Court did not have appellate jurisdiction because the trial court’s order from which the Chiluttis appealed did not qualify as a collateral order and, thus, the Superior Court erred in holding to the contrary and lacked jurisdiction to entertain the merits” of the Chiluttis’ substantive claim. As such, Chilutti II has rendered Chilutti I nonbinding, and the issue of enforceability of online arbitration agreements remains unresolved. However, in light of the fact the Supreme Court did not address or comment on the merits of the Chiluttis’ appeal, Chilutti I is still meaningful. Specifically, it provides guidance as to the standards a company should strive to meet to ensure they have obtained users’ assent so that they are able to enforce online arbitration agreements. Additionally, it may serve as persuasive authority in judges’ evaluations of petitions and/or motions to compel browsewrap arbitration agreements until this particular issue is properly put before our appellate courts. Keanna works in our Pittsburgh, PA office. She can be reached at (412) 803-1174 or KASeabrooks@MDWCG.com.

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