US Court of Appeals: TOS may be updated by email, use can imply consent [pdf]

Original Article ↗ Hacker News Discussion ↗

A recent unpublished ruling by the U.S. Ninth Circuit Court of Appeals held that a company (Tile) could bind users to updated Terms of Service, including mandatory arbitration, by emailing notice and treating continued app use as implied consent. Commenters question whether this is realistic or fair in a world of spam filters, unread mass emails, and already one‑sided “clickwrap” contracts, and warn it further entrenches corporate power over consumers. Many argue for stronger statutory limits on what standard terms can contain and how consent to changes must be obtained, while others note the decision is narrow, fact-specific, and not formal precedent.

Nature of the ruling

  • Memorandum decision by the Ninth Circuit; explicitly “not precedential.”
  • Narrow issue: whether users were on “inquiry notice” of updated Terms of Service (mainly a new arbitration clause) sent by email.
  • Court applies a three‑factor test; finds 2 factors favor notice, 1 against, so assent via continued use is valid in this case.
  • Judges stress this doesn’t mean mass email always establishes notice; it’s “fact‑intensive.”

Email notice, spam, and proof of delivery

  • Major disagreement over treating “email sent” as sufficient notice:
    • Critics say the court largely ignores that one email landed in spam and another user says they never saw it.
    • Others respond that spam classification is client‑side, not a delivery failure; users chose their provider and settings.
  • Concern that companies could game spam filters (nonstandard headers, etc.) to ensure emails vanish, then blame users.
  • Comparisons to registered mail and process‑service rules: lack of any reliable delivery or read confirmation makes email a weak channel for legally significant changes.

Consent via continued use

  • Court accepts “continued use after notice date = assent,” even when users never clicked “I agree.”
  • Many see this as coercive: users often can’t keep using under old terms or even access accounts/vehicles/TVs without accepting new ones.
  • Edge cases noted where users only open an app to avoid tracking, cancel service, or check settings, yet that is treated as consent.

Fairness, power imbalance, and unconscionability

  • Widespread view that modern TOS are unread, unmanageable, and effectively non‑negotiable.
  • Power asymmetry: large firms with lawyers vs. scattered consumers; forced arbitration singled out as especially abusive.
  • Some argue US contract law over‑prioritizes clearing dockets and corporate convenience at the expense of “meeting of the minds.”
  • Others say the court is simply following existing law; if the law is bad, legislatures must fix it (e.g., bills to curb forced arbitration).

Comparisons and alternatives

  • References to EU‑style consumer protections and civil‑law concepts (unfair terms, minimum standards, explicit opt‑in).
  • Some companies reportedly version terms per product and require explicit acceptance for new offerings, seen as more reasonable.

User reactions and counter‑moves

  • Ideas floated: emailing companies user‑authored TOS and claiming “continued service implies consent” (seen as legally dubious but rhetorically powerful).
  • Broader response: reduce reliance on cloud services, cancel subscriptions, use self‑hosted media, or avoid products tied to aggressive TOS updates.