01 Jul BSAD
Chapter 7: Agreement and Consideration in Contracts – Chapter 7 – Journal Entry
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AGREEMENT AND CONSIDERATION IN CONTRACTS (page 220)
Ted and Betty Hyatt live in California, a state that has extensive statutory protection for consumers. The Hyatts decided to buy a computer so that they could use e-mail to stay in touch with their grandchildren, who live in another state. Over the phone, they ordered a computer from CompuEdge, Inc. When the box arrived, it was sealed with a brightly colored sticker warning that the terms enclosed within the box would govern the sale unless the customer returned the computer within thirty days. Among those terms was a clause that required any disputes to be resolved in Tennessee state courts. The Hyatts then signed up for Internet service through CyberTool, an Internet service provider. They downloaded CyberTool’s software and clicked on the “quick install” box that allowed them to bypass CyberTool’s “Terms of Service” page. It was possible to read this page by scrolling to the next screen, but the Hyatts did not realize this. The terms included a clause that stated all disputes were to be submitted to a Virginia state court. As soon as the Hyatts attempted to e-mail their grandchildren they experienced problems using CyberTool’s e-mail service, which continually stated that the network was busy. They also were unable to receive the photos sent by their grandchildren.
Answer the following questions
1. Did the Hyatts accept the list of contract terms included in the computer box? Why or why not?
2. What type of agreement did the Hyatts form with Cyber Tool?
3. Suppose that the Hyatts experienced trouble with the computer’s components after they had used the computer for two months. What factors will a court consider in deciding whether to enforce the forum-selection clause? Would a court be likely to enforce the clause in this contract? Why or why not?
4. Are the Hyatts bound by the contract terms specified on CyberTool’s “Terms of Service” page that they did not read? Which of the required elements for contract formation might the Hyatt’s claim lack? How might a court rule on this issue?
FOR 2 POINTS OF EXTRA CREDIT, ANSWER:
The terms and conditions in click-on agreements are so long and detailed that no one ever reads one. Therefore, the act of clicking “Yes, I agree.” is not really an acceptance. Do you agree or disagree with this statement and why?
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