August 23, 2006
Customer Must Actually Get Terms for Gateway Rule to Apply
Whatever the merits of "terms in the box" contracts like that involved in Hill v. Gateway 2000, they don't apply to warranty limitations that are not, in fact, ever delivered to the customer. That's the ruling from a recent Massachusetts case, Schacter v. Circuit City Stores Inc., Civ. No. 05-12456, (D. Mass. May 3, 2006), reported in BNA's Electronic Commerce and Law Reporter.
In the case, the plaintiffs bought a phone from Circuit City and bought an extended warranty. The store gave them a glossy brochure describing the warranty, which explicitly noted that the details of the warranty were contained in another document. That other document was never delivered. The logic of the Gateway case -- that buyers are bound to the after-delivered terms if they do not return the goods -- doesn't apply, said the court, when the terms are never actually delivered.
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