By agreeing to these terms, you give up your right to sue Character.AI in court or join a class action lawsuit, and must instead resolve disputes through private arbitration, except for small claims.
This analysis describes what Character.AI's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
Arbitration is a private process where a neutral third party decides disputes rather than a judge or jury. This waiver prevents users from joining together in class action lawsuits, which are often the only practical way to pursue small individual claims against a large company.
Previous version had empty excerpt; current version now provides full arbitration clause text with explicit exception for small claims.
View full change record →If you have a dispute with Character.AI, including over data privacy, content use, or account issues, you cannot sue in court or join a class action unless you opted out within 30 days of agreeing to the terms; you must instead use JAMS arbitration, and your total potential recovery is capped at $100 or amounts paid.
How other platforms handle this
You and Teachable agree to resolve any disputes through final and binding arbitration, except as set forth under Exceptions to Agreement to Arbitrate below. You also agree that disputes will only be resolved on an individual basis and not as a class, consolidated, or representative action.
Any dispute arising from or relating to the subject matter of these Terms shall be finally settled by arbitration in San Francisco County, California, in accordance with the Streamlined Arbitration Rules and Procedures of Judicial Arbitration and Mediation Services, Inc. ("JAMS") then in effect, by ...
THESE TERMS REQUIRE THE USE OF ARBITRATION (SECTION 12.2) ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES, RATHER THAN JURY TRIALS OR CLASS ACTIONS, AND ALSO LIMIT THE REMEDIES AVAILABLE TO YOU IN THE EVENT OF A DISPUTE.
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"You and Character.AI agree that any and all disputes or claims that have arisen or may arise between you and Character.AI, whether arising out of or relating to these Terms (including any alleged breach thereof), the Website or Services, any aspect of the relationship or transactions between us, shall be resolved exclusively through final and binding arbitration, rather than a court, in accordance with the terms of this Arbitration Agreement, except that you may assert individual claims in small claims court, if your claims qualify. JAMS will administer the arbitration and will select the arbitrator as described below. The Federal Arbitration Act governs the validity and enforcement of this Arbitration Agreement. You and Character.AI agree that, by entering into these Terms, you and Character.AI are each waiving the right to a trial by jury or to participate in a class action. Your rights will be determined by a neutral arbitrator, not by a judge or a jury.— Excerpt from Character.AI's Character.ai Terms of Service
REGULATORY LANDSCAPE: This provision is governed by the Federal Arbitration Act (FAA) and is subject to ongoing scrutiny under California consumer protection law, which has periodically challenged the enforceability of class action waivers. The FTC has expressed concerns about mandatory arbitration clauses in consumer contracts as potentially unfair practices. EU/EEA users are generally not subject to binding arbitration waivers under EU consumer protection law, and class action waivers are not enforceable in many EU jurisdictions. GOVERNANCE EXPOSURE: High. The combination of mandatory arbitration, class action waiver, and a $100 liability cap creates a structure where individual users have limited practical recourse for small-value claims. The 30-day opt-out window is a standard mechanism, but its enforceability depends on adequate disclosure at onboarding. JAMS arbitration fees and procedures may create practical barriers for low-value consumer claims, though JAMS consumer rules include some fee protections. JURISDICTION FLAGS: EU/EEA users: mandatory arbitration clauses and class action waivers are generally unenforceable under EU consumer protection law and the EU's Collective Redress Directive. California: while the FAA generally preempts state law challenges to arbitration, California courts have scrutinized unconscionable arbitration terms, particularly in consumer contracts. The document's California-specific liability carve-out suggests awareness of these constraints. UK users post-Brexit are subject to UK consumer protection frameworks that similarly limit the scope of mandatory arbitration in consumer contracts. CONTRACT AND VENDOR IMPLICATIONS: Organizations deploying Character.AI under enterprise agreements should assess whether the arbitration clause applies to B2B relationships or only to consumer-facing terms. The pre-arbitration dispute resolution process requiring certified mail notice and a 60-day negotiation period adds procedural complexity that should be reflected in contract dispute management procedures. COMPLIANCE CONSIDERATIONS: Legal teams should confirm that the arbitration opt-out email address (legal@character.ai) is clearly disclosed to users at account creation and that the 30-day deadline is prominently surfaced. Consumer-facing disclosures should be audited for compliance with FTC guidance on arbitration clause disclosure. For EU/EEA deployments, the arbitration clause should be treated as inapplicable as a matter of local law, and dispute resolution procedures should reflect available court-based remedies.
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Arbitration is a private process where a neutral third party decides disputes rather than a judge or jury. This waiver prevents users from joining together in class action lawsuits, which are often the only practical way to pursue small individual claims against a large company.
If you have a dispute with Character.AI, including over data privacy, content use, or account issues, you cannot sue in court or join a class action unless you opted out within 30 days of agreeing to the terms; you must instead use JAMS arbitration, and your total potential recovery is capped at $100 or amounts paid.
ConductAtlas has identified this type of provision across 132 platforms. See the full comparison.
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