The agreement requires disputes between users and PayPal to be resolved through individual binding arbitration rather than court proceedings, and includes a waiver of participation in class action lawsuits.
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 users who do not opt out within 30 days of first accepting the agreement resolve all disputes with PayPal through JAMS or AAA arbitration on an individual basis, precluding class action participation. The enforceability of this clause for consumer financial services disputes may be subject to challenge under applicable state consumer protection statutes depending on jurisdiction.
Interpretive note: Enforceability of the class action waiver for consumer financial services disputes may vary by jurisdiction and may be subject to challenge under applicable state consumer protection statutes.
Previous version separated arbitration and class action waiver into two provisions; current version consolidates them into one and adds explicit reference to Legal Agreements page compliance.
View full change record →Under this clause, disputes with PayPal proceed through individual arbitration administered by JAMS or AAA rather than through court, and the agreement includes a waiver of class action participation. The agreement states that users may opt out by sending written notice to PayPal's Legal Department within 30 days of first accepting the user agreement.
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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.
Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration before one arbitrat...
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.
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"These terms include an agreement to resolve disputes by arbitration on an individual basis. You also agree to comply with each of the other terms or agreements on the Legal Agreements page that apply to you.— Excerpt from PayPal's PayPal User Agreement
1. REGULATORY LANDSCAPE: The arbitration clause and class action waiver engage the Federal Arbitration Act, which generally permits pre-dispute arbitration agreements, and may interact with the Consumer Financial Protection Bureau's historical rulemaking efforts on arbitration in consumer financial products. State consumer protection statutes in California and other jurisdictions may impose limitations on pre-dispute arbitration agreements in consumer financial services contexts; applicable law may limit how these terms apply in practice. 2. GOVERNANCE EXPOSURE: High. The combination of mandatory individual arbitration and class action waiver substantially affects the procedural options available to users with disputes against PayPal. For business users, the arbitration requirement applies to commercial disputes as well, which may conflict with preferred dispute resolution mechanisms in enterprise contracts. 3. JURISDICTION FLAGS: California presents heightened exposure due to the California Consumer Legal Remedies Act and related statutes that may restrict pre-dispute arbitration agreements in certain consumer contexts. The CFPB has historically sought to limit mandatory arbitration in consumer financial services, and future regulatory changes could affect enforceability. 4. CONTRACT AND VENDOR IMPLICATIONS: Organizations integrating PayPal as a payment processor should assess whether the mandatory arbitration clause in the user agreement conflicts with dispute resolution provisions in their own vendor agreements. The class action waiver may limit collective remediation options for systematic platform errors or fee disputes affecting multiple accounts. 5. COMPLIANCE CONSIDERATIONS: Legal teams should confirm whether the 30-day arbitration opt-out window was exercised at account opening. For newly onboarded business accounts, compliance teams should establish a process to track the opt-out deadline and assess whether individual arbitration is consistent with the organization's dispute resolution policy.
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This provision requires that users who do not opt out within 30 days of first accepting the agreement resolve all disputes with PayPal through JAMS or AAA arbitration on an individual basis, precluding class action participation. The enforceability of this clause for consumer financial services disputes may be subject to challenge under applicable state consumer protection statutes depending on jurisdiction.
Under this clause, disputes with PayPal proceed through individual arbitration administered by JAMS or AAA rather than through court, and the agreement includes a waiver of class action participation. The agreement states that users may opt out by sending written notice to PayPal's Legal Department within 30 days of first accepting the user agreement.
ConductAtlas has identified this type of provision across 26 platforms. See the full comparison.
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