Writer: Timothy Jin
Editor: Bryan Xiao
In a deluge of subheadings and elongated print, every service is now governed by terms and conditions. While paper copies once limited the spread of the tiny text, a pop-up now accompanies every search, website, and purchase. Under the constant bombardment of text, it’s hard for consumers to tell what truly matters.
Terms and Conditions, also known as Terms of Use and Terms of Service, are legally binding rules, stipulations, and requirements that define the relationship, rights, and obligations between a service provider and user.
While they are most prominent on the Internet, their origins trace back to the beginning of civilization itself. In Mesopotamia around 2300 B.C., clay tablets represented the earliest written agreements—detailing sales, loans, and employment. Plato recognized the basic categories for cancelling agreements, laborers during the bubonic plague unionized under contract, and the Rock stipulated that he couldn’t lose a fight on-screen. Simply, written agreements have followed the progression of human society.
However, most everyday interactions with contracts don’t reach the same heights. Most people face a ‘battle of the forms’ while signing up for the latest subscription service or visiting a new website. The constant stream of terms has made it difficult to discern which terms and conditions are truly consequential.
The truth is—for the most part—very few legal disagreements go to trial: Over 90% to 95% of civil cases, including personal injury and divorce, are resolved out of court through settlements, mediation, or dismissal. In federal criminal cases, roughly 98% end in plea bargains rather than trials. Thus, the majority of terms are never evoked, and most agreements are lost to metadata.
But hidden amongst all the jargon and loopholes, one clause has real standing. Exculpatory clauses relieve one party from liability for injuries, damages, or negligence caused to the other party during the agreement. In layman’s terms, the clause is a get-out-of-jail card.
Most commonly found in any strenuous activity, the long forms preluding every roller coaster ride, bungee jump, and CrossFit gym are now a part of everyday life. The tiny text on the back of the parking ticket and the sped-up voice at the end of every ad all seek the same end.
It’s easy to let the forms blitz by without second thought. After all, what are the chances of flying a roller-coaster? But, taking a step back, it’s important to ask—do the forms really matter, or are they just an easy chance for attorneys to score?
Tipping the Scale
The scary language, more often than not, is just that—scary language. When accidents happen, companies hope that the big notices will convince their customers to assume liability, while the small text does the dirty work of making it harder and harder to resist. In fact, many simply take firms’ word as law.
Doesn’t sound fair, does it? The short answer is that it isn’t. Because most seek separate avenues to remedy their injuries, firms bank on just that. Courts often refuse to enforce clauses that involve essential services (medical care, housing, or public utilities), gross negligence (reckless or intentional misconduct), and even simply for unclear language and meaning.
For example, the Supreme Court of California addressed the issue in a case close to home. In Tunkl v. Regents of the University of California, the court developed a six-factor test that governs cases related to the public interest—the legal term for essential services.
The facts were as follows: The University of California at Los Angeles Medical Center admitted Hugo Tunkl as a patient. The center was adjacent to a research program and focused on education in the field of medicine. Unlike a normal hospital, patients were selected and admitted if and only if the study and treatment of their condition would achieve their goals.
Upon his entry to the hospital, Tunkl signed a document setting forth certain “Conditions of Admission.” Amongst pages of legal text, the crucial sixth condition read: “Release: The hospital is a nonprofit, charitable institution. In consideration of the hospital and allied services to be rendered and the rates charged therefor, the patient or his legal representative agrees to and hereby releases The Regents of the University of California, and the hospital from any and all liability for the negligent or wrongful acts or omissions of its employees, if the hospital has used due care in selecting its employees.”
In short, the Regents sought to release themselves from any and all legal obligations. Even if the doctors killed Hugo Tunkl themselves, the plain language of the contract would have exempted them from legal repercussions.
Faced with the absurd nature of the situation, the Supreme Court of California handed a ruling laced in legal prose: “We cannot lightly accept a sought immunity from careless failure…Even if the hospital’s doors are open only to those in a specialized category, the hospital cannot claim isolated immunity.” While the hospital had argued that its unique status as a research facility should afford it additional protections, the court held firm. In short, their ruling affirmed that all hospitals and essential medical services can never be exempt from liability.
On separate grounds, the court went on to note that “..at the time of signing the release was in great pain, under sedation, and probably unable to read.” Ouch…
Modern-Day Dilemma
While it may be a relief that consumers will never have to understand the terms and conditions in forms at the hospital, the digital age introduces a new frontier. In addition to the abundant agreements for every internet service, the proliferation of mega-corporations introduces a new wrinkle in the complex world of contracts.
Typically, each form and agreement is limited to its physical parameters. Even in the case of online terms, the language-specific platform is in question. Agreeing to the terms of Amazon shouldn’t waive all rights when shopping at Whole Foods. Or does it?
A second clause with equally terrifying power is the “mandatory arbitration” clause. Simply, it is a promise that in the event there’s a dispute with the company, the signee agrees in advance to surrender the right to sue and to submit to a neutral third-party decision.
With the lengthy and costly nature of litigation, firms have been quick to adopt the practice. Arbitration case volumes vary based on the provider and industry, but the total number of forced arbitration cases skyrocketed 467% in 2022, and over 280,000 individual cases of mass arbitration were filed with the American Arbitration Association in 2024 alone.
While having a neutral third-party arbiter sounds like a win for the consumer, the shift to arbitration has major consequences. Win rates for consumers plummeted to just 0.7% in 2022, and mandatory arbitration is, as the name suggests, mandatory. This means that (1) there is no alternative, victims are unable to pursue alternative means such as litigation, and (2) the decisions are without appeal and final, meaning no second chances.
Moreover, these decisions are private and without the transparency and scrutiny of the courts. While courts heed the “Public Policy Doctrine” (a legal principle allowing courts to invalidate for the public good and morality) and are open to public hearings, arbitration is quieter and without much coverage.
Testing the Limits
With a 99% win rate in arbitration cases, companies have become bolder over time. Kanokporn Tangsuan, a doctor at NYU, suffered a fatal allergic reaction at a Disney World restaurant in 2023. However, the situation was far from blameless. The Walt Disney Company had advertised that the specific restaurant accommodated people with food allergies. The couple had chosen the restaurant specifically for this reason, receiving multiple reassurances from the waiting staff.
In response, Tangsuan’s husband, Jeffery Piccolo, filed suit against the restaurant and Walt Disney Parks and Resorts. Although the case seemed like a clear-cut example of negligence, Disney swiftly moved to remove the case from court on an arbitration clause. The catch? The couple had signed up for Disney+ nearly four years prior, in 2019.
In the thousands of words in the user agreement hid a single line: “You,…and Disney+ and/or ESPN+,…agree to resolve, by binding individual arbitration, all Disputes.” Like a nesting doll—in parentheses—hid the phrase “including any related disputes involving The Walt Disney Company or its affiliates.” Meaning a movie night would bind the couple from proper recourse, years after their cancellation. For reference, the current agreement is just short of 10,000 words.
While Disney ultimately retracted their motion due to negative backlash, the incident raised a host of questions. Is there ever an end to the agreements? Just how much can each company mandate? And, where does one company start and another end?
Dubbed “Infinite Arbitration,” both state and national legislatures have yet to fully grapple with the new era of online contracts and interconnection. Unlike the classic case of arbitration, these overly broad contractual provisions exist in perpetuity. Some even go as far as to include unrelated future interactions with a company or its affiliates.
However, the sudden shift is not all impending doom, as of January 1, 2026, Californians are now exempt. Senate Bill 82 limited the scope of infinite arbitration. In fact, eight other states have taken other approaches against infinite arbitration, including a creative application of a statute of limitations to arbitration clauses.
The bill aims to turn back the clock and return arbitration to its historical roots. “For example, a consumer agrees to arbitration when joining a gym. If the gym’s van later hits the consumer in a grocery store parking lot, SB 82 may prevent the gym from using the membership agreement to force the personal injury claim into arbitration.” Simply, arbitration is tied to the interaction, not the person.
Yet, the problem remains on the federal level. The Federal Arbitration Act, the main act governing arbitration in the United States, makes no mention of infinite arbitration nor its legality, leaving the question for individual states to solve, leaving millions in a coverage gap.
If there is a lesson in the fine print, it’s a modest one. While most of the terms and conditions are moot, a few matter a great deal.
Graphic by: Narayani Agarwal
Featured Image by Scott Graham on Unsplash
