Douglas v Talk America Case Regarding User Agreements.

In July, a case called Rogers v Talk America came down in the Ninth Circuit regarding user agreements that I find pretty interesting. In the Cyberlaw class I took my last semester at Cardozo, we discussed how user contracts govern the actions of people online, and can sometimes be used to overcome copyright rights held by users (like first-sale principles.) The ability of contracts to trump other forms of law is important considering the complexity of the contracts that exist nowadays to download an application or use a website. People are often unaware of the terms that they have bound themselves to, because they are unwilling to spend 30 minutes reading a contract just so they can download a simple computer application.

There is a good discussion of the case on the Technology and Marketing Law Blog. In the case, an AOL user agreed to a contract with AOL regarding telephone service. AOL subsequently sold its telephony business to Talk America, which then posted amendments to the user agreement online. After a dispute arose, Talk America attempted to say that the dispute should be decided by arbitration because of a clause in the amended agreement. The Ninth Circuit did not buy the argument because "parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side."

The second question this raises is whether or not the parties can agree in the original contract to permit one party to unilaterally amend the contract. I think that it would be clear this shouldn't be the case, considering there should be new consideration for any amendments made to the contract. Yet after this case we might expect to see such a provision in similar contracts, as it does the companies no harm to insert the provision as insurance in the event that it is upheld.