Designer Skin LLC v. S & L Vitamins, Inc., et al.
Wholesale Telecom Corp. v. ITC Deltacom Communications, Inc.
No. 05-13404 (11th Cir. April 14, 2006)
Plaintiff Bound By Online Contract Amendment Increasing Rates
Affirming the court below, the Eleventh Circuit holds plaintiff bound by online amendments to its agreement with defendant posted to defendant's website. As those amendments raised the rates due for defendant's services, which increased rates plaintiff refused to pay, the Eleventh Circuit affirmed the District Court's grant of summary judgment to defendant on its breach of contract claim. The Court found support for its decision in the parties' agreement, which bound plaintiff to tariffs "as the same may exist or be modified in the future [by defendant] . . . and/or as the same may appear on [defendant's] website."
ITC Posts Rate Increase Online
Defendant ITC Deltacom Communications, Inc. ("ITC") is a provider of telecommunications services, including local and long distance voice transmission. Plaintiff Wholesale Telecom Corporation ("WTC") is a wholesale provider of international long distance telecommunication services. The parties entered into an agreement pursuant to which ITC agreed to transmit WTC's calls at "Horizon Level V" rates. This rate schedule provided a flat rate for all international calls, whether they terminated to a land line or cellular phone. Because the cost to ITC of calls that terminated to a cellular phone were significantly greater than those that terminated to a land line, ITC decided to modify its rate schedule so as to impose a surcharge on calls terminating to cellular phones. An amended rate schedule was posted to ITC's website. ITC thereafter informed WTC of the rate change, and offered it the opportunity to terminate the parties' agreement. WTC refused, insisting instead that its traffic be handled at the initial flat rate schedule. This lawsuit followed.
WTC Bound Pursuant To Parties' Contract
The District Court, finding that ITC had the right to amend its contract by posting new rates online, granted ITC summary judgment on its breach of contract counterclaim. The Eleventh Circuit affirmed.
The parties' contract provided:
The Court held that, as used in this agreement, the term "tariff" included a schedule of ITC's rates.
More importantly, the Court held "that the unambiguous language of the agreement entitled ITC to raise its rates through the tariffs posted on the website." Said the Court:
Because WTC had failed to pay the increased rates, the Court found it had breached the parties' agreement.
It should be noted the Eleventh Circuit designated this decision as not for publication.