Monday, June 2, 2014

Caspi v. The Microsoft Network LLC case brief summary

Caspi v. The Microsoft Network LLC case brief summary

Microsoft charged membership fees attributable to a change in service plans without notice or permission from users. Before an individual can commence use of the Microsoft Network, she must first view a series of computer screens which set forth the terms of this subscriber agreement. These terms appear in a scrollable window next to blocks containing the words "I agree" or "I disagree," and set forth the terms pursuant to which the individual can use the Microsoft Network. The user cannot commence such use unless she clicks the "I agree" button. Each of the plaintiffs clicked the "I agree" button, thereby indicating their assent to be bound by the terms of the subscriber agreement. Both the trial and appellate courts held this created an enforceable contract between the defendants and their subscribers. Is an Internet forum selection clause enforceable?
a. Holding: The forum selection clause was enforceable because plaintiffs were aware of it at the time they entered into their agreement and they were free to reject the contract.

i. To conclude that plaintiffs are not bound by [the forum selection] that clause would be equivalent to holding that they were bound by no other clause [of the subscriber agreement] either, since all provisions were identically presented.

ii. Under NJ law, forum selection clauses are enforceable unless "(1) the clause is a result of fraud or 'overweening' bargaining power; (2) enforcement would violate the strong public policy of NJ; or (3) enforcement would seriously inconvenience trial." The court found that the clause at issue was not the result of "overweening bargaining power" because the plaintiffs could obtain the services offered by defendants from third parties, and therefore had the ability to reject the subscriber agreement if they did not like its terms.

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