0

A recent question asks whether one can escape the terms of an adhesion contract by orally rejecting the terms while making a confirmation in writing.

It seems likely the answer is no, as the written confirmation is an objective manifestation of assent to the bargain -- especially if the contract includes a merger clause.

But what if the customer doesn't actually provide written confirmation?

For instance, Shipping Company asks customers to sign a digital contract as part of each transaction. It includes standard business-friendly terms for arbitration, class-action waiver, etc., and presents the customer with a signature box before proceeding to complete the transaction.

So imagine the following: Buyer asks Shipping Company to deliver a package overnight. Shipping Company offers overnight delivery for $50. Buyer agrees. Shipping Company employee processes the transaction and asks Buyer to agree to sign the agreement to standard Shipping Company terms.

Buyer reviews the terms and does not like them. Instead of signing in the signature box, Buyer takes the pen and writes something like:

  • "No."
  • "Decline."
  • "These terms are unacceptable."
  • "I reject the arbitration clause."
  • Or "I agree only to pay $50 in exchange for overnight delivery."

Clerk either does not notice or does not care that Customer has not actually signed his name to the contract and completes the transaction.*

Shipping Company loses the package. Buyer sues. UPS moves to compel arbitration.

Must Customer arbitrate?

* For anyone who might get hung up on this, assume that Clerk has the ability to accept counteroffers on behalf of Shipping Company.

1 Answer 1

2

Real Option: The contract is still formed as offered by UPS

In the alternative, the contract has to be followed as written originally. In that case, the customer is obligated to arbitrate. In fact, the signing (or marking) of the terms of service might be simply acknowledgment of the standard contract, which was formed moments prior to the moment the customer handed over the package and paid.

The customer did not get any verification of the altered terms of service from the clerk - who couldn't negotiate those deals to begin with - and instead accepted the terms by not taking back the parcel.

Would the customer truly want to deny the offered terms, he'd have canceled the transaction and taken the parcel. Instead, he left it with the clerk and paid the transaction, which in itself makes a contract formation by action, very much akin to how you form a contract under the standard terms of the store by paying at the cashier for a bottle of soda.

This outcome is also what the court found in A.V. v. iParadigms, LLC, 544 F. Supp. 2d 473, 480 (E.D. Va. 2008) / 562 F.3d 630 (4th Cir. 2009)., indicating that at least in , any attempt to modify the contract by for example writing "I don't consent to archiving" on the file sent in via a plagiarism portal that has archiving in the ToS does not modify the contract:

First, the court found that the students and iParadigms entered into binding agreements when the students clicked on “I Agree,” and that the agreements shielded iParadigms from liability arising out of plaintiffs' use of the Turnitin website.   Furthermore, the court concluded that the disclaimers included on plaintiffs' written submissions did not “modify the Agreement or render it unenforceable. [4th Cir 2009]

Theoretical Option: The contract is not formed

By writing a non-confirmation and explicitly denying the contract, the contract does not fulfil the meeting of the minds. There is no renegotiation, as the agent of the company is not allowed to negotiate.

In a strange fashion, UPS would not be entitled to $50, but the customer is not entitled to any delivery, storage of the parcel or even to leave it at the company - and can't sue for the loss of more than the $50 because that is the total extent of their damages: the unjustly paid fees.

Non-Option: altered deal

The clerk is not tasked with negotiating or accepting different terms from those that UPS declares.

If the clerk just failed to notice the attempted altered deal, we are back to the two options above: either there is no deal, or the deal is as originally offered.

Would the clerk has actively agreed to a deal that fall outside of his tasks, the whole situation collapses to a variation of the theoretical option, where there is no valid contract between UPS and the customer. However, in this case, the clerk is liable for the damage to the parcel and the damage to UPS.

Why is this not an option? Let's cite A.V. v iParadigms in the lower court:

The existence of disclaimers on the written works indicating that Plaintiffs did not consent to the archiving of their works does not modify the Agreement or render it unenforceable. The Clickwrap Agreement itself provides that the terms of the Agreement are not modifiable. Plaintiffs had the option to "Agree" or "Disagree;" no third option was available to allow Plaintiffs to modify the Agreement. See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir. 2004) See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir. 2004) ("[The] choice was either to accept the offer of contract, taking the information subject to the terms of the offer, or, if the terms were not acceptable, to decline to take the benefits"). By clicking "I Agree," Plaintiffs agreed to the terms of the contract as described in the Clickwrap Agreement. Any attempted disclaimers written onto papers submitted after clicking "I Agree" did not change the terms of the Agreement.

1
  • Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Law Meta, or in Law Chat. Comments continuing discussion may be removed.
    – feetwet
    Aug 30, 2023 at 19:33

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .