By using PayPal, you agree to resolve any legal disputes with PayPal through individual arbitration rather than through a court, and you give up the right to have disputes decided by a judge or jury.
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 channels all disputes into a private arbitration process, which is administered by JAMS or AAA under their consumer or commercial rules, and requires disputes to be resolved on an individual basis rather than collectively.
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 →This provision was merged with Class Action Waiver into a consolidated provision in the current version, but the removal represents consolidation rather than substantive change.
View full change record →Users who experience disputes with PayPal over account actions, fees, or fund holds must bring those disputes through individual arbitration rather than court, and cannot join with other users in a class action proceeding, unless they opt out within 30 days.
How other platforms handle this
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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"Please read carefully all of the terms and conditions of this user agreement... These terms include an agreement to resolve disputes by arbitration on an individual basis.— Excerpt from PayPal's PayPal User Agreement
1) REGULATORY LANDSCAPE: This provision engages the Federal Arbitration Act as the primary governing framework for arbitration enforceability in U.S. consumer financial contracts. The CFPB has previously issued rulemaking on arbitration clauses in consumer financial contracts; while the 2017 CFPB arbitration rule was rescinded by Congress, the CFPB retains supervisory interest in arbitration practices at nonbank payment processors. State law in California, New Jersey, and other jurisdictions may present enforceability questions for class action waivers in consumer contracts. 2) GOVERNANCE EXPOSURE: High. The mandatory arbitration clause combined with a class action waiver significantly affects the aggregate dispute resolution rights of all U.S. account holders. The provision requires disputes to proceed through JAMS or AAA under their applicable rules, which may impose filing fees and procedural requirements that differ materially from small claims court. 3) JURISDICTION FLAGS: California courts have at times applied heightened scrutiny to class action waivers and unconscionability challenges in consumer arbitration agreements. New Jersey and Washington state have similarly produced adverse rulings against mandatory arbitration in certain consumer contexts. The enforceability of this provision for consumer (non-business) account holders may vary by state. 4) CONTRACT AND VENDOR IMPLICATIONS: B2B procurement teams integrating PayPal as a payment processor should note that the arbitration clause applies to business accounts as well. Indemnification and liability cap provisions in the broader agreement interact with this dispute channel, meaning that monetary recovery through arbitration is also subject to those caps. 5) COMPLIANCE CONSIDERATIONS: Legal teams should confirm that the 30-day opt-out procedure is clearly disclosed at account onboarding and that internal processes capture opt-out elections. Consumer financial service compliance teams should monitor CFPB guidance on arbitration practices for nonbank payment processors, as regulatory posture on this provision may evolve.
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This provision channels all disputes into a private arbitration process, which is administered by JAMS or AAA under their consumer or commercial rules, and requires disputes to be resolved on an individual basis rather than collectively.
Users who experience disputes with PayPal over account actions, fees, or fund holds must bring those disputes through individual arbitration rather than court, and cannot join with other users in a class action proceeding, unless they opt out within 30 days.
ConductAtlas has identified this type of provision across 21 platforms. See the full comparison.
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