Source: http://www.internetlibrary.com/topics/contract.cfm
Timestamp: 2019-04-24 08:38:46+00:00

Document:
America Online Inc. v. Robert Pasieka, et al.
Affirming the court below, Florida District Court of Appeal holds that America Online's ("AOL") forum selection clause, which mandates that all claims relating to the use of AOL be brought in Virginia, is unenforceable with respect to a class action lawsuit brought under two Florida consumer protection statutes - the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and the Florida Free Gift Advertising Law (FFGAL). The Appellate court accordingly affirmed the denial of AOL's motion to dismiss for improper venue.
The court, following the decisions of the Seventh Circuit in Hill and ProCd, holds that contract terms shipped to the consumer along with computer products form the contract between the consumer and supplier, where these terms clearly state that they will be binding on the consumer if she retains the products for 30 days, and the consumer so retains the products. The court further holds that inclusion in this contract of a clause mandating arbitration in Chicago of all disputes arising out of the parties' transactions does not render the contract an unenforceable contract of adhesion. However, requiring that such disputes be arbitrated in accordance with the rules of the International Chamber of Commerce ("ICC"), which requires the payment by the consumer of a $4000 fee, of which $2000 is non-refundable even if the consumer prevails, is unconscionable. This is true because this fee exceeds the price of most of the products defendant sells, and therefor effectively denies plaintiff any forum in which to resolve disputes arising out of the purchase of the product. The court accordingly directed the parties to arbitrate their dispute before an arbitrator to be selected by the court, as opposed to the ICC, as had been designated in the parties' contract.
Craig Comb, et al. v. PayPal, Inc.
Court holds that both PayPal's User Agreement, and the arbitration clause found therein, are unconscionable under California law. The Court accordingly denies motions by PayPal to compel users who commenced putative class action suits arising out of PayPal's allegedly inappropriate handling of customer accounts and/or complaints to resolve their claims via arbitration. The Court held that the User Agreement and the arbitration clause therein are unconscionable because they: (1) permit PayPal to issue binding amendments to the User Agreement at any time without notice to users; (2) obligate users to arbitrate their disputes pursuant to the commercial rules of the AAA, which is cost prohibitive in light of the average size of a PayPal transaction; (3) obligate users who reside nationwide to arbitrate in Santa Clara county, California, where PayPal is located; (4) permit PayPal to freeze and maintain possession of the funds in customer accounts until any dispute is resolved; and (5) require users to pursue their claims individually, and not via a class action. Taken together, the Court held these provisions made the User Agreement unconscionable, and appear to represent an attempt by PayPal "to insulate itself contractually from any meaningful challenge to its alleged practices."
DeJohn v. The .TV Corporation International, et al.
Court holds that plaintiff entered into a binding online click-wrap agreement by clicking an 'I Agree' icon, which indicated he had read, understood and agreed to the terms of the parties' contract. The contract's terms were available for review online by clicking on a link which appeared on the Register.com website just above the 'I Agree' icon. As a result, the Court dismissed the claims advanced by plaintiff, because plaintiff commenced suit in a forum other than the exclusive jurisdiction specified in the forum selection clause contained in the parties' contract; asserted state law claims under the laws of a state which were rendered inapplicable by the contract's choice of law provisions, and asserted claims that failed in light of the contract's terms.
Court holds plaintiff bound by a click-wrap agreement entered into by her travel companion with defendant Expedia Inc. (“Expedia”) when she purchased tickets and hotel accommodations on plaintiff’s behalf. The travel companion was acting as plaintiff’s agent, and by her acceptance of the agreement, bound plaintiff to its terms. As such, the Court dismissed plaintiff’s claims against Expedia for personal injuries sustained at the hotel she visited when her sandal broke, causing her to fall down stairs and into an ornamental pond, holding them barred by the liability disclaimer contained in the parties’ agreement. The Court further held that plaintiff’s claims against Expedia failed because it owed her no duty to warn of dangerous conditions that allegedly existed at the resort in question.
The Court did deny defendant Gap Inc.’s (“Gap”) motion for summary judgment, and allowed plaintiff to proceed with her claims that a defective sandal she purchased from Old Navy, owned by the Gap, failed, causing her to fall and sustain the injuries at issue. The Court rejected the Gap’s motion that such claims should be barred by application of the spoliation doctrine, as plaintiff had not preserved the sandal in question. The Court held plaintiff could not be held responsible for the absence of the sandal, as she had left it at the resort at the time of the injury, while she was rushed to the hospital, and was unable to locate it subsequently. Issues of fact as to whether the Gap actually manufactured the sandal in question would await trial for resolution.
Affirming the decision of the court below, the Second Circuit Court of Appeals holds that plaintiffs are not bound by the terms of a license agreement purporting to govern the use of a software product they downloaded because plaintiffs neither had reasonable notice thereof, nor adequately manifested their assent to be bound thereby. The software in question could be downloaded from a page on defendant Netscape's web site by clicking on a button which said "download". The terms of the license agreement in question were not contained on this web page, however, and the only notice the user received of the license agreement was found on a portion of the web page below the download button. Typically, this notice appeared "below the fold" and was not on that portion of the page which first appeared on the user's screen when he went to download the program. This notice informed the user that his use of the software would be governed by the terms of a license agreement, which terms could be seen by clicking on a link provided on the web page. Once the program was downloaded, the user received no further notice of either the license agreement or its terms. The Court held that this procedure did not create a binding contract between the parties.
The Second Circuit further held that the terms of a license agreement plaintiffs did agree to, governing their use of Netscape's browser, did not obligate them to arbitrate the claims they raised in this litigation. These included claims that Netscape violated both the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act by causing Netscape's Smart Download software, a Netscape browser 'plug in', to send information to Netscape about plaintiffs' downloading activities.
Court holds that act of downloading software does not indicate assent to be bound by terms of license agreement, where a link to such terms appears on, but below that portion of the web page that appears on the user's screen when such downloading is accomplished. As a result, the Court holds that under California law, plaintiffs are not bound by the terms of such license agreement, or the arbitration clause contained therein, despite language in the license agreement which provides that by installing or using the software, the user consents to be bound by the terms of the license agreement.
Wholesale Telecom Corp. v. ITC Deltacom Communications, Inc.
Affirming the court below, the Eleventh Circuit holds plaintiff bound by online amendments to its agreement with defendant posted to defendant's website. As those amendments raised the rates due for defendant's services, which increased rates plaintiff refused to pay, the Eleventh Circuit affirmed the District Court's grant of summary judgment to defendant on its breach of contract claim. The Court found support for its decision in the parties' agreement, which bound plaintiff to tariffs "as the same may exist or be modified in the future [by defendant] . . . and/or as the same may appear on [defendant's] website."
Williams v. America Online, Inc.
Court denies defendant AOL's motion to dismiss complaint, which motion was brought on the ground that plaintiffs commenced the instant action in an improper forum in violation of a forum selection clause contained in AOL's Terms of Service. Finding, inter alia, that the injury alleged in the complaint occurred before the plaintiffs were asked to agree to be bound by AOL's Terms of Service, the court denied AOL's motion.
Michael Cohn v. Truebeginnings, LLC, et al.
Affirming the court below, a California intermediate appellate court holds that an auction's sites customer cannot be compelled pursuant to the terms of an online agreement to arbitrate claims seeking a "public injunction" under California state statutes prohibiting unfair competition and false advertising. Plaintiff brought claims under Section 17200 and 17500 of California's Business and Professions Code, charging uBid with overcharging him for shipping costs by overstating the weight of the item he purchased.
For additional cases, see the Click-Wrap Agreement.

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