Selected Online Contracts Cases

Eric Goldman

Last updated 10/16/2006

 

This is a list of cases involving online contract formation, interpretation and enforceability.

 

 

Abramson v. America Online, Inc., 2005 U.S. Dist. LEXIS 10095 (May 25, 2005).

 

American Airlines, Inc. v. Farechase, Inc. (Tex. Dist. Ct. Mar. 8, 2003) (upholding American Airlines’ website’s online user agreement).

 

America Online, Inc. v. Booker, 781 So. 2d 423 (Fla. App. Feb. 7, 2001) (enforcing AOL’s forum selection clause in its user agreement).

 

America Online, Inc. v. Pasieka (Fla. Dist. Ct. App. Jan. 29, 2004) (refusing to uphold AOL’s forum selection clause for consumer protection claims).

 

Aral v. Earthlink, Inc. (Cal. App. Ct. Nov. 29, 2005) (striking down mandatory Georgia arbitration clause in California class action suit)

 

Barnett v. Network Solutions, Inc. 38 S.W.3d 200 (Tex. Ct. App. Jan. 11, 2001) (upholding the forum selection clause in NSI’s user agreement, even though the user had to scroll to see the clause).

 

Bergraft v. eBay (N.J. Super. Ct. Oct. 1, 2003) (upholding eBay’s user agreement). http://eric_goldman.tripod.com/caselaw/begraftvebay.pdf

 

Cairo, Inc. v. Crossmedia Serv., Inc., 2005 WL 756610 (N.D. Cal. Apr. 1, 2005) (upholding forum selection clause in license even though license wasn’t a click-through; terms of use were merely linked and accompanied by the phrase “By continuing past this page and/or using this site, you agree….” on every webpage).

 

Caspi v. Microsoft Network L.L.C., 732 A.2d 528 (N.J. Superior Ct. July 2, 1999) (upholding the forum selection clause in MSN’s click-through scrollable user agreement). http://www.bna.com/e-law/cases/caspi.html.

 

Celmins v. America Online, Inc. 748 So. 2d 1041 (Fla. Dist. Ct. App. May 19, 1999) (enforcing AOL’s forum selection clause in its user agreement).

 

Comb v. PayPal, Inc., 218 F. Supp. 2d 1165 (N.D. Cal. Aug.30, 2002) (rejecting a motion to compel arbitration because the user agreement was unconscionable). http://pub.bna.com/eclr/021227.htm.

 

Davidson & Assoc., Inc. v. Internet Gateway, 334 F. Supp. 2d 1164 (E.D. Mo. Sept. 30, 2004) (upholding two click-wrap user agreements).

 

Decker v. Circus Circus Hotel, 49 F. Supp. 2d 743 (D. N.J. May 12, 1999) (dismissing jurisdiction based on Internet order for a hotel room given forum selection language on the site).

 

DeFontes v. Dell Computers Corp., 2004 R.I. Super. LEXIS 32,52 U.C.C. Rep. Serv. 2d 823 (Del. Super. Jan. 29, 2004) (rejecting Dell’s browse-wrap license in accordance with Specht; rejecting Dell’s shrink-wrap for lack of “sufficient notice of the method to reject”). 

 

DeJohn v. .TV Corp., 245 F. Supp. 2d 913 (N.D. Ill. Jan 16,2003) (upholding Register.com’s click-through agreement for domain name registrations). 

 

DiLorenzo v. America Online, Inc. (N.Y. Supreme Ct. January22, 1999) (upholding AOL’s choice of forum clause in its terms of service), http://legal.web.aol.com/decisions/dlother/dilorenzo.html. 

 

Dix v. ICT Group (Wash. Ct. App. Feb. 17, 2005) (refusing to uphold AOL’s forum selection clause).

 

Durick v. eBay, 2006 WL 2672795 (Oho Ct. App. Sept. 11, 2006) (upholding eBay’s user agreement, including provisions incorporated by reference).

 

Dyer v. Northwest Airlines, 334 F. Supp. 2d 1196 (D. N.D. September 8, 2004) (rejected Plaintiff’s contract claim, which was based on Northwest’s privacy policy posted on their Internet website). 

 

EIJ, Inc. v. United Parcel Serv., Inc., 2004 U.S. Dist. LEXIS 18481 (C.D. Cal. Sept. 8, 2004) (upholding UPS’s click-through Tariff[user agreement]). 

 

ESL Worldwide.com, Inc. v. Interland, Inc., 06 CV 2503 (S.D.N.Y. June 21, 2006) (upholding forum selection clause in mandatory clickthrough agreement).

 

Evans v. Matlock 2002 Tenn. App. LEXIS 906 (Tenn. Ct. App. Dec. 23, 2002) (eBay user agreement arbitration clause does not apply to intra-user disputes), http://www.tsc.state.tn.us/opinions/tca/PDF/024/EvansD.pdf.

 

Forrest v. Verizon Communications, Inc., 805 A.2d 10007  (D.C. App. Ct. Aug. 29, 2002)(upholding arbitration clause in DSL service click-through agreement that was in a scroll box), http://www.dcbar.org/dcca/pdf/01-cv-1101.pdf. 

 

Freedman v. America Online, 294 F. Supp. 2d 238 (D. Conn. Dec. 5, 2003) (upholding AOL’s forum selection clause).

 

Grace v. eBay, 120 Cal. App. 4th 984 (Cal. App. Ct. July 22, 2004) (upholding eBay’s liability “release” in its user agreement), http://www.steptoe.com/publications/312d.pdf. 

 

Groff v. America Online, Inc., 1998 R.I. Super. LEXIS 46 (Super. Ct. R.I. May 27, 1998) (upholding AOL’s forum selection clause), http://legal.web.aol.com/decisions/dlother/groff.html. 

 

Hotmail Corporation v. Van$ Money Pie Inc., 47 U.S.P.Q.2d (BNA) 1020 (N.D. Cal., April 20, 1998) (a default judgment finding, among other things, that spammers breached Hotmail’s click-through agreement, that a violation of the click-through agreement was trespass, and that bogus consent to a click-through agreement was fraud/misrepresentation), http://eric_goldman.tripod.com/caselaw/hotmailvvansmoneypie.htm. 

 

Hubbert v. Dell Corp. (Ill. App. Ct. Aug. 12, 2005).

 

Hughes v. McMenamon, 204 F. Supp. 2d 178 (D. Mass. May 28, 2002) (upholding AOL’s user agreement).

 

I-Systems, Inc. v. Softwares, Inc., 2004 U.S. Dist. LEXIS 6001 (D. Minn. Mar. 29, 2004) (denying summary judgment in part by upholding I-Systems’ click-through and shrink-wrap licenses). 

 

I.Lan Sys., Inc. v. Netscout Serv. Level Corp., 183 F. Supp. 2d 328 (D. Mass. Jan. 2, 2002) (upholding a click-wrap license). 

 

Jessup-Morgan v. America Online, 20 F. Supp. 2d 1105 (E.D. Mich. July 23, 1998) (finding that a user had breached AOL’s Member Agreement by sending a false message to USENET), http://legal.web.aol.com/decisions/dlpriv/jessup.html.

 

In re JetBlue Airways Corp. Privacy Litigation (E.D.N.Y. Aug. 1, 2005) (hyperlinked privacy policy may be a contract even if plaintiff doesn’t allege that it was read; but no contract damages are possible for breach of privacy policy).

 

Mariano, Gwendolyn, Juno Settles Terms-of-Service Dispute, CNET News.com, May 7, 2002, at http://news.com.com/2102-1023-901740.html (N.Y. State’s Attorney General “reached a settlement with Juno[], requiring[Juno] to give people ‘clear, conspicuous and advance’ notice of changes to its service agreement”).  

 

Kanitz v. Rogers Cable Inc., 112 A.C.W.S. 3d 48, 21 T.L.W.D. 2146-014  (Ont. S.C.J. Feb. 22, 2002) (upholding an amendment to a written user agreement that was notified via email with a link to a website containing the amendment).

 

Kilgallan v. Network Solutions, 99 F. Supp. 2d 125 (D. Mass. May 31, 2000) (Defendant’s email stating “In making payments for invoice below, Registrant agrees to the terms of the current . . . Agreement” is upheld as an offer while Plaintiff’s mailing of payment is upheld as the acceptance).

 

Koch v. America Online, 139 F. Supp. 2d 690 (D. Md. 2000) (enforcing AOL’s forum selection clause).

 

Liekschke v. RealNetworks, Inc., 2000 U.S. Dist. LEXIS 1683 (N.D. Ill. February 10, 2000) (directing arbitration pursuant to RealNetworks’ click-wrap user agreement).

 

Lim v. dotTV Corp. (Cal. Ct. App. June 24, 2002) (disputes over whether dotTV’s way of auctioning golf.tv was a binding contract).

 

Mendoza v. America Online (Cal. Superior Ct. September 25, 2000) (rejecting AOL’s venue clause in its member agreement as unfair). Upheld on appeal: America Online, Inc. v. Superior Court (Mendoza) 90 Cal. App. 4th 1 (Cal. App. Ct. June 21, 2001), http://login.findlaw.com/scripts/callaw?dest=ca/caapp4th/90/1.html.

 

Miles v. America Online, 202 F.R.D. 297 (M.D. Fla. Aug. 3, 2001) (refusing to enforce AOL’s forum selection clause).

 

Mortgage Plus, Inc. v. DOCMAGIC, Inc., 2004 U.S. Dist. LEXIS 20145 (D. Kan. Aug. 23, 2004) (upholding click-wrap license and forum selection clause within license).

 

Motise v. America Online, Inc., 346 F. Supp. 2d 563 (S.D.N.Y. Nov. 30, 2004) (third parties who are using a member’s service are subject to the same terms of service as that member).

 

Mudd-Lyman Sales and Service Corp. v. United Parcel Service, Inc., 236 F. Supp. 2d 907 (N.D. Ill. Nov. 26, 2002) (proper contract formation through shrink-wrap agreement and click-through agreement), http://www.sfl-legal.com/cases%202003/Mudd-Lyman%20v.%20UPS.htm.

 

Net2Phone, Inc. v. State ex rel Consumer Cause, Inc., 109 Cal. App. 4th 583 (Cal. App. June 9, 2003) (implicitly upholding Net2Phone’sforum selection clause, even if the user agreement was formed only through a hyperlinked contract with the language “by using the site or materials, you agree…”), http://www.courtinfo.ca.gov/opinions/documents/B162210.PDF.

 

Network Solutions, Inc. v. Hoblad, 82 Fed. Appx. 845 (4th Cir. Dec. 19, 2003) (upholding online NSI’s registration agreement). 

 

Novak v. Overture Servs., 309 F. Supp. 2d. 446 (E.D.N.Y. Mar.25, 2004) (upholding Google’s discussion groups click-through terms and conditions agreement, specifically the forum selection clause). 

 

Nazaruk v. eBay, 2006 WL 2666429 (D. Utah Sept. 14, 2006) (upholding eBay’s forum selection clause).

 

Oppedahl & Larson v. Network Solutions, Inc., 3 F. Supp. 2d 1147 (D. Colo. April 16, 1998) (deeming the application of NSI’s online registration contract in Oppedahl’s circumstance a question of fact), http://www.bna.com/e-law/cases/oppensi.html.

 

Person v. Google Inc., 2006 WL 2884444 (S.D.N.Y. Oct. 11, 2006) (upholding forum selection clause in Google’s AdWords user agreement).

 

Pollstar v. Gigmania (E.D. Cal. Oct. 17, 2000) (“small grey text on a grey background” alerting web users of a user agreement is enough to survive a 12(b)(6) motion). 

 

Ploharski v. eBay (N.D. Ga. August 1, 2000) (upholding the forum selection clause in eBay’s user agreement).

 

Prudential Insurance Co. v. Prusky (E.D. Pa. July 27, 2005), http://www.paed.uscourts.gov/documents/opinions/05D0871P.pdf (E-SIGN does not require dissemination of notice in electronic format).

 

In re. RealNetworks, 2000 U.S. Dist. LEXIS 6584 (N.D. Ill. May 8, 2000) (upholding a click-through agreement with arbitration and forum selection clause).

 

Register.com v. Verio, 126 F. Supp. 2d 238 (S.D.N.Y. Dec. 8, 2000) (upholding Register.com’s click-through [“by submitting this query, you agree to abide by these terms”]), http://www.icann.org/registrars/register.com-verio/order-08dec00.htm. Affirmed by Register.com v. Verio, 356 F.3d 393 (2d Cir. Jan. 23, 2004).

 

Rosenfeld v. Zerneck, 2004 NY Slip Op 2143 (NY Supreme Ct. May 4, 2004) (email satisfies statute of frauds).

 

Scarcella v. America Online, 4 Misc. 3d 1024A (N.Y. Civ. Ct. Sept. 8, 2004) (AOL’s motion to dismiss based on forum selection clause from online contract denied due to “strong public policy[.]”).

 

Affirmed by Appellate Division, Dec. 28, 2005, http://www.steptoe.com/publications/389a.pdf.

                                                                              

Shattuck v. Klotzbach, 14 Mass. L. Rep. 360 (Mass. Super. Ct. December 11, 2001) (emails negotiations are enough to survive a 12(b)(6) motion based the statute of frauds and lack of essential elements of a contract). 

 

SmartText Corp. v. Interland, Inc. (D. Kan. Dec. 19, 2003) (whether failure to respond to an email is acceptance through silence is a question of fact; later history, Interland failed to reply and default judgment was granted in favor of SmartText [2004 U.S. Dist. LEXIS 6469]), http://www.ksd.uscourts.gov/opinions/032393-17.pdf.

 

Sotelo v. DirectRevenue, LLC, No. 05 C 2562 (N.D. Il.. Aug. 29, 2005) (browse-wrap style contract formation failed), http://www.spywarewarrior.com/SCAN2854_000.pdf.

 

Spera v. America Online, Inc. (N.Y. Supreme Court, January27, 1998) (upholding the enforceability of a forum selection clause in AOL’s click-through terms of service).

 

Specht v. Netscape Communications Corp., 150 F.Supp.2d 585 (S.D.N.Y., July 5, 2001) (non-mandatory click-through is not a binding contract), http://www.nysd.uscourts.gov/courtweb/pdf/D02NYSC/01-07482.PDF. Affirmed on appeal, 306 F.3d 17 (2d Cir. Oct. 1, 2002), http://csmail.law.pace.edu/lawlib/legal/us-legal/judiciary/second-circuit/test3/01-7860.opn.html. 

 

Ticketmaster, Inc. v. Tickets.com, 54 U.S.P.Q.2d (BNA) 1344 (C.D. Cal. Mar. 27, 2000) (contract terms linked to from the bottom of the page are not necessarily binding on people who access the page), http://pub.bna.com/ptcj/ticketmaster.htm.  Ruling denying Ticketmaster, Inc. preliminary injunction, Ticketmaster, Inc. v. Tickets.com, 2000 U.S. Dist. LEXIS 12987 (C.D. Cal. Aug. 10, 2000).  Ruling denying Tickets.com summary judgment on the contract claim, Ticketmaster, Inc. v. Tickets.com, 2003 U.S. Dist. LEXIS 6483 (C.D. Cal. March 6, 2003), http://eric_goldman.tripod.com/caselaw/ticketmastermarch72003.htm.

 

Thompson v. Handa-Lopez, Inc., 998 F. Supp. 738 (N.D. Tex. Mar. 25, 1998) (declining to give effect to an express but “inconspicuous” clause in the user agreement requiring arbitration in the defendant’s home court).

 

Waters v. Earthlink, Inc., 91 Fed. Appx. 697 (1st Cir. Oct. 31, 2003) (affirming district court’s refusal to enforce an user agreement that was merely “linked” on an arbitrary webpage). 

 

Williams v. America Online, 2001 WL 135825 (Mass. Super. Ct. Feb. 8, 2001) (refusing to enforce AOL’s forum selection clause in its user agreement because it was possible to download the software without agreeing to it), http://www.socialaw.com/superior/000962.html. 

 

Zurakov v. Register.com (N.Y. App. Div. April 22, 2003) (discussing what a domain name registrant expected based on their contract), http://www.courts.state.ny.us/reporter/slips/13230.htm. 

 

 

Other non-cyberspace cases to consider:         

 

1-A Equipment Company v. Icode, Inc, 2003 Mass. App. Div. 30(Feb. 21, 2003) (upholding the forum selection clause in Icode’s click-through license). 

 

Bischoff v. DirectTV Inc., 180 F. Supp. 2d 1097 (C.D. Cal.2002) (upholding satellite TV provider’s customer agreement).

 

Boomer v. AT&T Corp., 2002 U.S. Dist. LEXIS 10679 (N.D. Ill. June 13, 2002) (refusing to grant motion to compel arbitration based on service agreement, which was “accepted” upon continuation of use of service.).  Reversed on appeal, Boomer v. AT&T Corp., 309 F.3d 404 (7th Cir. Oct. 3, 2002). 

 

Briceno v. Sprint Spectrum, L.P., 2005 WL 2093681 (Fla. App. August 31, 2005) (cellphone terms and conditions upheld).

 

Brower v. Gateway 2000, 676 N.Y.S.2d 569 (N.Y. App. Div., August 13, 1998), http://www.ljx.com/cgi-bin/f_cat?test/ht-docs/ny.archive.html/98/08/081798dd.html.

 

Discover Card v. Superior Court ex rel Boehr (Cal. Sup. Ct. June 27, 2005) (class action waivers in consumer contracts of adhesion are unenforceable).

 

Hill v. Gateway 2000, 105 F.3d 1147 (7th Cir. 1997), http://www.law.emory.edu/7circuit/jan97/96-3294.html.

 

Klocek v. Gateway, Inc., 104 F. Supp. 3d 1332  (D. Kansas, June 15, 2000) (rejecting the enforceability of shrink-wraps), http://www.ksd.uscourts.gov/opinions/99-2499-26.html.

 

Laster v. T-Mobile USA, Inc., ___ F.Supp.2d ___ (S.D. Cal. Nov. 30, 2005) (cellphone arbitration clauses unconscionable).

 

Levy v. Gateway 2000, Inc. 1997 WL 823611 (N.Y. Sup. Aug. 12, 1997) (enforcing the agreements sent within a package).

 

Licitra v. Gateway, Inc., 734 N.Y.S.2d 389 (NY Civil Court Oct. 2001) (small claims action trumps arbitration clause in user agreement).

 

Lively v IJAM, Inc., 2005 OK Civ. App. 29 (2005) (contract formed when computer ordered by telephone; subsequent terms contained in box were disregarded).

 

M.A. Mortensen Co. v. Timberline Software Corp., 970 P.2d803 (Wash. Ct. App. Feb. 1, 1999) (upholding the enforceability of a shrink-wrap agreement included on the envelope inside the box), http://www.bna.com/e-law/cases/timber.html.

 

Mattingly v. Hughes Elecs. Corp., 2002 WL 3144472 (Md. Ct. Spec. App. Nov. 4, 2002) (amendment to customer agreement failed).

 

Moore v. Microsoft Corp., 293 A.D.2d 587 (N.Y. App. Div. 2d Apr. 15, 2002) (upholding a software install click-through license).

 

ProCD v. Zeidenberg, 89 F.3d 1257 (7th Cir. 1996), http://www.bna.com/e-law/cases/procd.html.

 

Rinaldi v. Iomega, 1999 WL 1442014 (Del. Super. Sept. 3, 1999) (enforcing a disclaimer of warranties contained inside the packaging when there was a refund opportunity).

 

Rogers v. Dell Computer Corp., 2005 WL 1519233 (Okla. June 28, 2005) (contract formed when computer ordered by telephone; subsequent terms contained in box were disregarded).

 

Stenzel v. Dell, Inc. (Sup. Ct. Maine Mar. 15, 2005). 

 

Storm Impact Inc. v. Software of the Month Club, 1998 U.S. Dist. LEXIS 11789 (N.D. Ill. July 29, 1998) (shareware license agreement contained valid restrictions on redistribution).

 

Ting v. AT&T, 182 F. Supp. 902 (N.D. Cal. Jan. 15, 2002) (striking down an arbitration clause in a service agreement as unconscionable).

 

Westendorf v. Gateway 2000, Inc., 2000 WL 307369 (Del. Ch. Ct., March 16, 2000) (enforcing the contract contained in the packaging even though the computer was paid for by someone else).