PayPal User Agreement

This is PayPal's core legal agreement for U.S. users, covering everything from sending and receiving money to how disputes are handled and what happens if PayPal freezes your account. The single most important thing to know is that by using PayPal, you give up your right to sue PayPal in court as part of a class action and must instead resolve disputes one-on-one through binding arbitration — but you have 30 days from first accepting the agreement to opt out of this by mailing a written notice. If you want to keep your options open legally, send a written opt-out letter to PayPal's arbitration opt-out address within 30 days of creating your account.

This document is the PayPal User Agreement governing the contractual relationship between PayPal, Inc. and U.S.-based account holders (personal and business) for use of PayPal's payment platform, legally constituting a binding contract effective upon account opening or continued use. The most significant obligations include users' agreement to resolve all disputes through binding individual arbitration (with a 30-day opt-out window), PayPal's right to hold or freeze funds, close accounts, and place reserves on business accounts, and users' consent to PayPal obtaining credit reports from credit reporting agencies. Notable provisions deviating from industry standard include PayPal's explicit right to set off negative balances by drawing from any linked payment method without advance notice, its broad license to use user-provided content, and the seller protection program's significant carve-outs that leave many transaction types unprotected. The agreement engages the Electronic Fund Transfer Act (EFCA/Regulation E), Bank Secrecy Act/AML requirements, CFPB payment regulations, FCRA (credit report access), NACHA rules for ACH transactions, and state money transmission laws; compliance teams should note that the mandatory arbitration clause with class action waiver creates litigation risk exposure in jurisdictions where such clauses face heightened judicial scrutiny, and the broad account suspension/fund-hold provisions may warrant review under CFPB Regulation E error resolution timelines.