Georgia Looks at the Creation of a Contract Through a Phone App

Legal Alert

May 18, 2021

Consumers increasingly conduct business on their phones. They create accounts and make purchases through apps on their phone. But when does a consumer create a binding contract when he conducts business on his phone? The Georgia Court of Appeals addressed that in Thornton v. Uber Technologies, Inc., Case No. A21A0131 (decided May 17, 2021).

The issue in Thornton was the enforceability of an arbitration agreement contained in Uber’s terms of service. To use Uber, a consumer downloads an app onto his phone and uses the app to create an account. During the course of creating an account, a notice appears stating that by creating an Uber account, the consumer agrees to Uber’s terms and conditions and privacy policy. The screen also shows a hyperlink that will lead the consumer to a document containing all of the terms and conditions, including an arbitration clause.

The issue before the Court of Appeals was whether the consumer had agreed to Uber’s terms and conditions when he created an account. The Court held that whether the consumer had agreed was a disputed issue of fact.

The Court held that the app presented a notice of the terms and conditions in a sufficiently conspicuous manner. In addition, a blue, underlined hyperlink sufficiently gave notice to the consumer of where to find the terms and conditions. But, the facts of the Thornton case created a disputed issue as to whether the consumer had seen the notice and the hyperlink. While creating the account on the app on an Android phone, a keyboard appeared for the consumer to enter credit card information, and the keyboard obscured the notice and the hyperlink. Therefore, the Court could not conclude that the consumer had seen the notice and the hyperlink.

Although a factual disputed existed in Thornton, the Court’s reasoning would allow the creation of a binding contract through a notice of terms and a hyperlink in a phone app. Therefore, as a general rule, a consumer will not be able to claim that he did not agree to terms and conditions if a phone app provided them with notice of the existence of those terms and a hyperlink to access them.

The opinion is available at https://efast.gaappeals.us/download?filingId=65a7db90-cfeb-40c9-9f10-cf11e2b26666