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Valparaiso Univ. Law School

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Tuesday, December 18, 2012

Clickwrap Contract Containing Arbitration and Forum Selection Clauses Upheld in 10th Circuit

10th Cir.At this point, it should come as no surprise that consumers can be held to the terms of agreements they enter into by clicking on a box next the words "I agree" on a computer screen or simply by continuing to use services after being provided with notice of the terms.  But what if the computer screen belongs to a technician who installs your television and voice communications services?  And what if notice of the change in terms to your internet service comes in an e-mail notifying you that you are accepting new terms by continuing to use the service?

In Hancock v. American Telegraph and Telephone Co., Inc., the 10th Circuit held that contracts entered into through such mechanisms are enforceable.  The 10th Circuit affirmed a District Court ruling dismissing all of plaintiffs claims based on forum selection and arbitration clauses.

On appeal, plaintiffs argued they did not knowingly accept AT&T's terms, claiming that the registration process to sign up for AT&T's services was complex and confusing and thus deprived them of an opportunity to give meaningful assent to governing terms.  Plaintiffs also raised factual issues that they thought should have precluded dismissal.  For example, one of the plaintiffs submitted an affidavit claiming that he was never informed of AT&T's terms of service and never agreed to them.  When the "I agree" box is on a technician's computer rather than on the consumer's, how do we know who clicked the box?  In a footnote, the court found immaterial the distinction between clicking a box on a technician's laptop and one on your own. 

As to plaintiffs' arguments about the obscurity of the registration process, their best case was Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002), in which the court struck down terms that were hidden because the consumer would have had to scroll down a screen in order to find them.   But the Tenth Circuit distinguished this case from Specht and found that AT&T's terms were not hidden.  In order to register for AT&T's internet services, consumers must first acknowledge that they have read and agreed to AT&T's terms, and a technician may not install television and voice services until the consumer has acknowledged receipt of AT&T's terms.

Based on declarations providing information of AT&T's standard practices, the Tenth Circuit found that the District Court had not erred in resolving factual disputes in AT&T's favor.  

[JT]

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