The agreement requires that all disputes between users and PayPal, including federal and state statutory claims, be resolved through individual binding arbitration administered by the AAA rather than through court proceedings, subject to a small claims court exception for qualifying individual claims.
This analysis describes what PayPal'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
This provision requires that disputes proceed through AAA arbitration on an individual basis, which determines the procedural forum and rules applicable to any claim a user may bring against PayPal. The breadth of the clause, covering federal and state statutory claims as well as common law and contract claims, is a provision that legal teams and regulators have examined in consumer financial services contexts.
⚠ Users who do not mail an opt-out notice within 30 days of first accepting the agreement are bound by the arbitration clause as written, and disputes with PayPal will proceed through AAA arbitration on an individual basis
⚠ Users who remain bound by the arbitration clause agree that class action participation against PayPal is waived under the terms of the agreement
Cross-platform context
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Compare across platforms →"You and PayPal each agree that any and all disputes or claims that have arisen or may arise between you and PayPal, including without limitation federal and state statutory claims, common law claims, and those based in contract, tort, fraud, misrepresentation or any other legal theory, shall be resolved exclusively through final and binding arbitration or in small claims court. You or PayPal may assert claims in small claims court instead of in arbitration if the claims qualify and so long as the matter remains in small claims court and advances only on an individual (non-class, non-representative) basis. This Agreement to Arbitrate is intended to be broadly interpreted. The Federal Arbitration Act governs the interpretation and enforcement of this Agreement to Arbitrate.Excerpt from PayPal's User Agreement
REGULATORY LANDSCAPE: The Federal Arbitration Act governs interpretation and enforcement of this clause, as the agreement explicitly states.
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This provision requires that disputes proceed through AAA arbitration on an individual basis, which determines the procedural forum and rules applicable to any claim a user may bring against PayPal. The breadth of the clause, covering federal and state statutory claims as well as common law and contract claims, is a provision that legal teams and regulators have examined in …
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