Court Holds That Evidence of Clickwrap Assent Not Always Sufficient When Evidence Disputing Assent is Presented

Electronic Signatures Digital Commerce

On June 29, in Jim Schumacher, LLC v. Spireon, Inc., Civ. Action No. 3:12-cv-00625-TWP-CCS, a Tennessee federal judge denied the motion for partial summary judgment as to the breach of contract claim because there was evidence that the plaintiff did not use the defendant’s portal or authorize an agent to use the defendant’s portal to manifest assent to the modified contract terms even though the defendant had digital evidence of such assent to the clickwrap agreement, thus creating a factual dispute. In 2005, the plaintiff became a reseller of the defendant’s vehicle location devices.  In 2009, the defendant modified its agreement, and placed the modified agreement on its customer portal website through which resellers manage purchases, sales, and customer data.  Visitors to the portal were required to click “I Accept” or “I Decline” before being permitted to access any other information on the portal.  The defendant produced digital evidence demonstrating that someone with the correct login and password accepted the 2009 agreement, and further digital evidence that someone with the correct login and password accepted an agreement in 2010 as well.  The plaintiff claims that he did not use the portal after the defendant placed the 2009 agreement on the portal, and thus could not have assented to the clickwrap agreement.  During this time, the plaintiff also did not authorize his representative to agree to the terms of the 2009 amendment, nor did he give any other users the ability to execute the agreement on his behalf.  The plaintiff filed a lawsuit alleging a breach of contract claim and a fraud claim based on the 2005 agreement. 

The defendant argued that the 2005 agreement was superseded by the plaintiff’s acceptance of the 2009 agreement, which itself was superseded by the plaintiff’s acceptance of the 2010 agreement, and that the defendant had digital evidence of the plaintiff’s assent.  The plaintiff contended that neither argument was properly executed on his behalf.  The defendant argued that the plaintiff cannot avoid summary judgment by asserting a failure to see, read, or sign the 2009 or 2010 agreements.  In so doing, the defendant relied on two cases where the terms of the “clickwrap” agreement were enforced against a party who claimed lack of agreement to the terms.  The court distinguished this case from those two cases by noting that in both of those cases, undisputable evidence existed that the party assented to the terms of the clickwrap, either because the party used the website to make travel arrangements or because the party incorporated software into its own products that could only have been installed if the party agreed to the clickwrap agreement. Here, the court noted, the plaintiff did not use the portal after the defendant posted the amended agreements.  Regarding the defendant’s argument that some with apparent authority executed the agreements, the court found that no evidence existed that the plaintiff granted anyone but his representative authority to act on his behalf and that the record was silent regarding whether the plaintiff’s representative did execute the agreements.  Therefore, the court denied the defendant’s motion for summary judgment regarding the breach of contract claim because a factual dispute existed regarding which contract controlled.  Finally the court allowed the plaintiff’s fraud claims to proceed only regarding alleged statements made between January 2011 and March 10, 2011, when the defendant claims it terminated the 2010 agreement with the plaintiff.