This is a continuation from my notes and readings taken earlier. Here, we will finish the introductory chapter of the casebook and brief a couple of cases outlining the changes of contract law.
Reading Notes
The Lawyering Perspective
As an attorney, you will need to prepare to be a counselor, negotiator, drafter, and advocate for a client. Many times you may be able to resolve a dispute outside of a courtroom, but there may also be times where you will need to take court action. This is because contract law is growing in complexity.
Contract law through time: 2 case studies
Allen v. Bissinger & Co.
Supreme Court of Utah 62 Utah 226; 219 P. 539 (1923) Page 18 in casebook
Parties
Although not mentioned by name, I believe the Plaintiff is Allen and the defendant is Bissinger and Co.
Procedure
Plaintiff won in the lower court, and the defendant appealed.
Question
Did the defendant enter into an agreement with the plaintiff by his correspondence?
Rule
Mutual assent can be determined by the words of the parties through intention to enter into the agreement. Intention can be determined through “his words or acts, judged by a reasonable standard” to agree to the matter in question.
Holding
Judgement is affirmed. The words written here express an intention to enter into this agreement.
Facts
The plaintiff is a company in NYC who sent out letters about a report they were compiling (pretty much an advert). The defendant requested a copy of the report, but was surprised when they received multiple reports and was charged for all of it. The plaintiff said that they were to report all the proceedings and could not stop because of the labor already performed. Defendant refused to pay the amount and plaintiff sued.
Analysis
There was no “uncertainty or ambiguity in the offer.” There was an offer and the defendant requested an order of the same. The defendant requested “your official report” which is commonly known to reference all the content of a report. Using the reasonable standard, the court finds that there was an intention to agree to the report and the evidence was there to say that the defendant accepted the plaintiff’s offer.
It is important to note that there was no fraud in question, nor any other parts of the agreement. The only thing in question was whether the agreement was accepted.
Why should we care?
We are using this case to determine how the passage of time has changed. Seeing how this is the first case from the early 1900s. This agreement was made through letters. Additionally, we see how strict the court is in following the rule. I’m sure that we will explore in more depth how these features may have changed over time.
The court used an objective theory to interpret the language of the acceptance. So, instead the court uses the specific language instead of the intention in making the agreement. We care about what the person does, not what the person intends. Because if we went into what people intended, the court system would be a mess.
In a lot of our cases, the courts will talk about intention, but they don’t mean it. This principle is called “fictional intention”.
Meyer v. Uber Technologies, Inc.
United States Court of Appeals 868 F.3d 66 (2nd Cir. 2017)
Parties
Meyer is the plaintiff and appellee. Uber is the defendant and appellant.
Procedure
Meyer sued, won and so Uber appealed.
There, the trial court said that Meyer had no due notice of the attribution agreement and so he could not agree to it.
Legal Question
- Would a reasonably prudent user have proper notice of the terms and conditions here?
- Did Meyer give his assent to that notice?
Rule
An offeree is not bound to a inconspicuous contractual provision for which is is unaware, which is contained in a document where the contractual nature is not obvious.
Holding
The notice was not inconspicuous, therefore the arbitration clause may apply. Reversed and Remanded.
Facts
Meyer downloaded the Uber app, set up an account, and used it about 10 times. He was frustrated that third-party drivers could set their own prices. So, he decided to sue Uber. Uber filed for a motion to dismiss because he agreed to the arbitration clause, meaning he could not be a plaintiff against Uber. The trial court denied because Meyer said that he was not aware of a contract or the terms and conditions buttons on the registration screen.
Analysis
The court conducts the analysis in two parts, researching the law and applying the law.
Applicable Law
The first part here is designed to research the applicable law. To do so, the court examined the procedural framework, state contract law, and common law for web-based contracts. I will go over each of these briefly.
For the procedural framework, the court needed to determine if there was an agreement in question. Here we have an arbitration clause which states that the offeree is not allowed to sue Uber as a plaintiff. So, the parties are not required to arbitrate unless they have agreed to do so. The question here is whether or not Meyer agreed to do so. There is no dispute to the claim that the clause exists and we only need to answer the question as to whether he had proper notice.
California state law says that he needs to have notice, and if the notice is not obvious, then the contractual nature is void. This part moves into the major analysis which is for web-based contracts.
Courts in the past have said that web-based contracts are fine, there is nothing quite so offensive about it. However, this is different than usual because most web-based contracts have you click on a box to agree after clicking on a hyperlink to view the agreement (or scroll through the agreement before agreeing). However, here, the case is different because there is only a hyperlink to the terms of service and privacy policy with the text underneath it stating that by creating an account, you agree to the terms. Importantly, the court says that this is fine.
Application
Why does the court say this is fine? Because a reasonable smartphone user would likely have encountered many agreements on the internet and many of these agreements are hyperlinked. The app was clean, the text was not in unusual places and the link took them to the intended locations. The court provided an analogy in the following way:
“Clicking a hyperlinked phrase is the twenty-first century equivalent of turning over the cruise ticket. In both cases, the consumer is prompted to examine the terms of sale that are located somewhere else.”
So, because the screen was uncluttered, they were prompted to agree, and informed properly, the court said that a reasonable person would see this as a contract.
Further, as for assent, the fact that the button both creates an account and agrees to the agreement is not an issue. This is because the text underneath the hyperlinks clearly states the purpose of the button.
Why should we care?
Here we see that Meyer was online, while Allen was in person. We do a lot of agreements online. Thus, the times have changed and the way we interpret “did the enter into an agreement?” has also changed.
Additional Notes
An important thing to consider is that the cases in contract law are not landmark cases. However, there are a lot of cases that illustrate a broader principle or rule. So, we would want to organize our notes by the applied rules, rather than the cases. One consequence of this is that we will probably not want to cite cases on the midterm, instead focusing on rules.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
