Designer Skin LLC v. S & L Vitamins, Inc., et al.
Paola Briceño v. Sprint Spectrum, L.P., d/b/a Sprint PCS
Case No. 3D05-144 (Florida Dist. Crt. App., August 31, 2005)
Plaintiff Held Bound By Amendment To Contract, Terms Of Which Were Posted Online, As A Result Of Reciept Of Written Notice Of Amendment
Plaintiff held bound by Amendment to telephone services contract which obligated plaintiff to arbitrate disputes with the telephone service company, the terms of which Amendment were posted online. Plaintiff was held bound as a result of her receipt of an invoice that gave her both notice of the Amendment and a location on the Internet at which its terms could be viewed, as well as the opportunity to cancel her contract if she did not wish to be bound thereby. Plaintiff was held bound despite the fact that she neither read the terms of the Amendment, nor in any way affirmatively indicated her assent to be bound thereby. Because the Amendment obligated plaintiff to arbitrate her dispute with defendant Sprint, the Florida District Court of Appeals affirmed the lower court's grant of defendant's motion to compel arbitration.
Plaintiff Receives Notice Of Amendment In Mailed Invoice
In 2000, plaintiff entered with a contract with Sprint for telephone services. She thereafter received invoices for these services in the mail, including a June 1, 2003 invoice. This invoice advised plaintiff that the terms of her contract with Sprint had been amended. The invoice further advised plaintiff that she could view the terms of this amendment, and indeed the contract itself, at both Sprint's website, and on her telephone. If plaintiff did not want to be bound by the Amendment, plaintiff was advised that she could terminate her contract with Sprint.
In October 2003, plaintiff brought her phone to a Sprint store for repair. Plaintiff alleged that during this repair Sprint employees obtained the password to her email account, and thereby access to embarrassing photos they subsequently disseminated to others. As a result, plaintiff commenced suit against Sprint, alleging, inter alia, invasion of privacy and interception and dissemination of electronic communications in violation of Florida statutes.
Sprint moved to compel plaintiff to arbitrate, arguing that she was bound by the terms of a 2001 Amendment to her contract that made arbitration of disputes with Sprint mandatory.
The lower court granted Sprint's motion, and the District Court of Appeal affirmed. The Appellate Court held that plaintiff was bound by this amendment. The court reached this result notwithstanding the fact that plaintiff claimed that she neither read the terms of the Amendment, nor indicated her assent to be bound thereby. Indeed, plaintiff claimed never to have received the original contract with Sprint itself.
Amendment Not Unconscionable
The Court also rejected plaintiff's argument that the Amendment, compelling her to arbitrate her dispute with Sprint, should not be enforced because it was unconscionable. Under Kansas law, which governed as a result of a choice of law provision contained in the parties' Agreement, the contractual provision at issue will be enforced "[u]nless . . . under the circumstances, [it is] so outrageous and unfair in its wording or its application that it shocks the conscience or offends the sensibilities of the court, or is against public policy . . . ". Kansas analyzes a number of factors in reaching this determination including "the circumstances surrounding the execution of the contract, the concealing of clauses which are disadvantageous to one party in a mass of fine print or in places which are inconspicuous to the party signing the contract, the inclusion of penalty clauses, exploitation of the underprivileged, unsophisticated, uneducated and illiterate, and inequality of bargaining or economic power." Applying these factors to the case at bar, the Court held that the Amendment was not unconscionable, particularly in light of the notice thereof given plaintiff in the June 2003 invoice, and the opportunity plaintiff was given to cancel her contract if she did not accept the terms of the amendment.
The Court warned that it may have reached a different conclusion if an election to terminate the contract to avoid being bound by the amendment carried with it a penalty, such as might be triggered by an early termination clause on a telephone services contract. Because there was no evidence that that had occurred here, however, the court did not resolve that question. Said the court: