Opinion ID: 2996012
Heading Depth: 5
Heading Rank: 1

Heading: Where an offeree takes the benefit of offered

Text: services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation. 16 No. 02-2667 Boomer argues that he did not have a reasonable op- portunity to reject the offer, and therefore his continued use of AT&T services did not constitute an acceptance. This argument also fails because the CSA Mailing clearly provided a mechanism for rejecting AT&T’s offer: The cover letter stated in bold capitalized letters that “IF YOU DO NOT AGREE TO THESE PRICES, CHARGES, TERMS AND CONDITIONS, DO NOT USE THE SERVICES, AND CANCEL THE SERVICES IMMEDIATELY BY CALLING AT&T AT 1-888-288-4099.” Thus, Boomer had a reasonable opportunity to reject AT&T’s offer, but nonetheless continued to use his AT&T services—services that were offered with the clear and explicit expectation of compensation. Under these circumstances, Boomer’s silence constituted an acceptance. See, e.g., Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1148-49 (7th Cir. 1997) (concluding that under Illinois law the plaintiffs’ silence constituted an accept of the terms and conditions— including an arbitration clause—set forth on a form contract included in the box which contained the computer that the plaintiffs had ordered from the 5 defendant and which they accepted). 5 The district court distinguished Gateway by noting that in Gateway the Hills had admitted to receiving the form contract, but failed to read it, whereas in this case Boomer does not admit that he received the CSA Mailing. However, as noted above, Boomer does not contend that he did not receive the mailing— just that he does not remember receiving it. Where a letter is properly addressed and mailed, there is “a presumption that it reached its destination in usual time and was actually received by the person to whom it was addressed.” See Hagner v. United States, 285 U.S. 427, 430 (1932). In this case, AT&T presented proof through the Declaration of Ellen Reid, the AT&T employee who oversaw the mailing of the CSA to AT&T cus- (continued...) No. 02-2667 17 Boomer further challenges the existence of a contract by arguing that there was no consideration for the CSA. In support of this argument, Boomer first points to the following language: “[B]e assured that your AT&T service or billing will not change under the AT&T Consumer Services Agreement.” Boomer claims that this language shows that he received nothing in exchange for his agreement to arbitration. This argument is misplaced—in exchange for his agreement to arbitrate, AT&T agreed to provide continued telephone services. It is true that when there is an existing contractual obligation, a promise to continue performing that legal obligation lacks consideration. But AT&T had no legal obligation to continue providing Boomer with telephone services. Therefore, Boomer received something of legal value—continued service—in exchange for his promise to arbitrate. That AT&T could have canceled Boomer’s telephone services is actually Boomer’s second basis for claiming a lack of consideration: Boomer asserts that because AT&T expressly told him that if he did not agree to the terms of the CSA, it would cancel his service, there was no “bargained-for exchange,” and thus no consideration. 5 (...continued) tomers, verifying that proper mailing procedures were followed. Boomer does not present any conflicting evidence in this regard. Thus, we must presume that Boomer received the mailing. Id. See also Godfrey v. United States, 997 F.2d 335, 338 (7th Cir. 1993) (a presumption exists that a mailing is received where there is “proof of procedures followed in the regular course of operations which give rise to a strong inference that the [correspondence] was properly addressed and mailed”). In any event, on appeal Boomer does not claim that the CSA did not constitute an offer because he did not receive the CSA mailing. 18 No. 02-2667 This argument also fails, however, because, contrary to Boomer’s position, the “bargained-for exchange” requirement does not prohibit the execution of form contracts presented on a take-it-or-leave-it basis. See Metro East Center for Conditioning and Health v. Qwest Communica- tions International, Inc., 294 F.3d 924, 926 (7th Cir. 2002) (“Yet we have held that form contracts, offered on a take-it-orleave-it basis, are agreements for purposes of the Arbitration Act.”). See, e.g., Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 367 (7th Cir. 1999); Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1148 (7th Cir. 1997). Rather, under general contract principles a bargained-for exchange exists if one party’s promise induces the other party’s promise or performance. See Hartbarger v. SCA Services, Inc., 558 N.E.2d 596, 604 (Ill. App. 1990) (“A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.”) (quoting Restatement (Second) of Contracts § 71 (1981)). See also, Restatement (Second) of Contracts § 71, comment b at 173 (1981) (“ ‘Bargained for.’ In the typical bargain, the consideration and the promise bear a reciprocal relation of motive or inducement: the consideration induces the making of the promise and the promise induces the furnishing of the consideration.”). In this case, AT&T’s promise to continue telephone services (something it was not obligated to do) induced Boomer’s corresponding promise (among other things) to arbitrate, and thus there was a bargained-for exchange and consideration. See, e.g., Metro East, 294 F.3d at 926 (explaining that although the agreement’s provision for arbitration may be non-negotiable, it is nonetheless an agreement “because the person could have chosen to do something else”). Next Boomer argues that AT&T committed fraud by deemphasizing the CSA and presenting it as a non-event, No. 02-2667 19 whereas in reality by so inducing customers to agree to the CSA they waived valuable rights. Boomer, however, fails to point to any language in the CSA Mailing or in the accompanying CSA that was false or misleading. Moreover, the cover letter clearly and explicitly highlighted the differences between the CSA and the previous terms contained in the tariff, noting that “[t]he Agreement also describes our new binding arbitration process, . . . .” Thus, the plain language of the CSA Mailing negates Boomer’s claim of fraud. In sum, the CSA Mailing constituted an offer and Boomer’s continued use of AT&T services constituted an acceptance. Consideration supported each party’s promises and Boomer failed to present any evidence of fraud. Accordingly, the CSA constituted a contract, and as such established the terms and conditions governing AT&T’s relationship with Boomer, one of which was an arbitration clause. Based on this clause, AT&T moved to compel arbitration of Boomer’s claims against it. Boomer, however, contends that even if the CSA is a contract, the arbitration clause should not be enforced because it is unconscionable and violates the Illinois Consumer Fraud Act and the Deceptive Business Practices Act. AT&T responds that the Communications Act preempts Boomer’s state law challenges to the validity of the arbitration clause. We now turn to the question of preemption.