In a recent product liability dispute case, the New Jersey Appellate Division has ruled to enforce the “clickwrap” agreement, which required arbitration of the dispute. The case, known as Jeffrey Santana vs. SmileDirectClub, LLC, Docket A-2433-21, __ N.J. Super. __, was decided on April 3, 2023.
As reported by JD Supra, the defendant in the case, SmileDirectClub, LLC (“SDC”), provides a platform that enables dentists and orthodontists to offer transparent-aligner treatment. To get the treatment, users must set up an online account through the SDC platform. The “clickwrap” agreement, which is presented to users when they sign up for SDC’s services, contains the arbitration provision that has been upheld by the Appellate Division.
Clickwrap agreements are commonplace in e-commerce. They present users terms and conditions that they must agree to by clicking an “I agree” button or checkbox, before access to a service or purchase of a product can be made. Given their digital nature, these kinds of agreements can raise certain legal issues, particularly when they contain serious provisions, like arbitration requirements. This case, therefore, raises interesting questions about their use.
Details surrounding the context of the product liability dispute in this case have not been extensively reported. However, the decision to uphold the arbitration provision as valid and enforceable does underline the substantial power that these simple digital agreements can have. For legal professionals dealing with e-commerce, this serves as an important reminder to handle such clauses with due care.