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Sunday, February 23, 2014

Dropbox Adds Arbitration Clause

California Mediation and Arbitration reports the clause has what are now pretty typical provisions for consumer agreements:

Arbitration will be administered by the AAA under the Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related Disputes. 
  • Arbitration will be held in the US in the county where you live or work, San Francisco (where Dropbox is headquartered) or any other location the parties agree to.
  • Dropbox will pay arbitration fees for claims less than $75,000.  If you receive a more favorable award than what Dropbox offers to pay, you get a bonus of $1,000, in addition to the award.  Dropbox won’t seek fees and costs in arbitration – unless the arbitrator determines your claim is frivolous.
  • Exceptions to the arbitration requirement include small claims, or injunctive relief for certain claims.
  • There is a class action waiver:  “You may only resolve disputes with us on an individual basis, and may not bring a claim as a plaintiff or a class member in a class, consolidated, or representative action.”

  • Pace University Law Professor Jill Gross writes at the consistently-strong ADR Prof Blog "I wonder whether Dropbox adopted the few consumer-friendly features of the clause simply to please its users, to forestall any finding of unconscionability based on the class action waiver, or to try to retain users who might object."

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