Thursday, March 27, 2014

Dropbox terms of service: now requires arbitration

Dear friends: if you use Dropbox, which is a a fabulous free cloud storage service, you may want to pay attention. Today is the first day to opt out of their new term. They are beginning to assume all users agree to a clause that requires they submit all claims to arbitration, unless you opt out during this short (30 day) period.

To opt out, if you already have a subscription, sign in, and select "Privacy" as a link near the bottom left of your home screen, right next to "Help." When you click on "Privacy," it defaults to show you "Privacy Policy," but there are other tabs. Select instead "Terms of Service," the left-most tab. You have to scroll down this page a way, down below "Copyright" and "Termination" and "Limitation of Liability" to find "Resolving Disputes." This is the one you want!

The third paragraph talks about "Opt-out of Agreement to Arbitrate," and gives you a simple hyperlink to click on to do so. You only have to fill in your name as registered with Dropbox to complete the process.

You can read the plain English terms they have there explaining their arbitration agreement. It makes it sound nice and friendly and very attractive. You might note, however, that you are also agreeing that you may not bring any class action, and that if the arbitration fails, you have to bring your suit in San Francisco, California, unless it's a small claims action.

The reason I am opting out of arbitration without a second thought is an article written by my colleagues here at Suffolk about shrink-wrap and click arbitration clauses. These assume you have agreed to binding arbitration to solve disagreements with online service providers, software developers, etc., by unwrapping your package or by subscribing to the service. Dropbox's terms are not too abusive, compared with some of the agreements discussed in my colleagues' article, but it was enough to make me think very hard about agreeing to any sort of forced arbitration clause!

Rustad, Buckingham, D'Angelo and Durlacher, An Empirical Study of Predispute Mandatory Arbitration Clauses in Social Media Terms of Service Contracts

and for a briefer introduction, see Michael Rustad's blog post at ContractsProf Blog, Michael Rustad on Reforming Wrap Contracts (Nov. 21, 2013).

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