You cannot sue PayPal in court or participate in a class action lawsuit — all disputes must go through private arbitration handled on an individual basis only.
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 restructures the dispute resolution framework by substituting arbitration as the mandatory procedural mechanism for all claims except small claims matters. The individual arbitration requirement prevents consolidation of claims across multiple users and establishes arbitration as the exclusive forum for resolution.
This clause strips you of the right to sue PayPal in court or join other consumers in a class action lawsuit, forcing you into a private arbitration process where the economics often favor large companies over individual claimants.
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 PayPal agree that any claim or dispute at law or equity that has arisen, or may arise, between you and PayPal (including any claim or dispute between you and a third-party agent of PayPal) will be resolved in accordance with the provisions set forth in this Agreement to Arbitrate. Please read this section carefully. It affects your rights and will have a substantial impact on how claims you and PayPal have against each other are resolved. In this Agreement to Arbitrate, you and PayPal agree to resolve any claim between us only by binding arbitration, on an individual basis, and not in any court or before any judge or jury, except for matters that may be taken to a small claims court.— Excerpt from PayPal's PayPal User Agreement
(1) REGULATORY FRAMEWORK: This provision implicates the Federal Arbitration Act (9 U.S.C. § 1 et seq.), which governs enforceability, and the CFPB's 2017 arbitration rule (12 CFR Part 1040), which was subsequently nullified by Congress under the Congressional Review Act. The CFPB retains supervisory authority over PayPal as a nonbank payment service provider and has signaled renewed interest in arbitration limitations under its unfair, deceptive, or abusive acts or practices (UDAAP) authority (12 U.S.C. § 5531). California courts have historically scrutinized class action waivers under California Civil Code § 1670.5 (unconscionability doctrine). (2)
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Coinbase's User Agreement includes a mandatory arbitration clause that most users may not have reviewed. Here is what the clause states and how the opt-out process works.
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This provision restructures the dispute resolution framework by substituting arbitration as the mandatory procedural mechanism for all claims except small claims matters. The individual arbitration requirement prevents consolidation of claims across multiple users and establishes arbitration as the exclusive forum for resolution.
This clause strips you of the right to sue PayPal in court or join other consumers in a class action lawsuit, forcing you into a private arbitration process where the economics often favor large companies over individual claimants.
ConductAtlas has identified this type of provision across 6 platforms. See the full comparison.
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