Instant Messenger Conversation Modifies Contract; Signed With 'Awesome'

from the awesome-indeed dept

Many people don't quite realize that almost any kind of "agreement" can be seen as an enforceable contract in the eyes of the courts. While some people think a contract has to involve a full written document and signatures, that's often not true at all. Take, for example, a case involving affiliate sales of e-cigarettes, in which a written contract was deemed to be modified by a simple instant messenger conversation. The affiliate company, CX Digital, wanted to remove the contractual limit of 200 referrals per day for sales of Smoking Everywhere's e-cigs, and the following IM conversation ensued:
[CX] (2:50:08 PM): We can do 2000 orders/day by Friday if I have your blessing

[CX] (2:52:13 PM): those 2000 leads are going to be generated by our best affiliate and he's legit

[Smoking Everywhere]: is available (3:42:42): I am away from my computer right now

[CX] (4:07:57 PM): And I want the AOR when we make your offer #1 on the network

[Smoking Everywhere] (4:43:09 PM): NO LIMIT

[CX] (4:43:21 PM): awesome!
Smoking Everywhere then tried to bail out on paying CX the affiliate fees owed, and claimed (among other things) that this didn't represent an actual modification of the contract which had the 200 per day limit stated. The court didn't buy it, noting that this is a perfectly fine example of an offer, counter-offer and acceptance, all encapsulated in instant messenger:
After the discussion between Touris and Soltani about switching the URLs, Soltani sends an offer to Touris: "We can do 2000 orders/day by Friday if I have your blessing . . . . [a]nd I want the AOR when we make your offer number one on the network." ... Touris responds, "NO LIMIT." ... CX Digital argues that Touris accepted Soltani's offer by saying "NO LIMIT." The Court agrees a contract was formed but clarifies that Touris's response acted as a rejection and counter-offer that Soltani accepted by then replying "awesome!"

[....] Here, Touris's response of "NO LIMIT" varies from the two specific terms Soltani offered and so acts as a counter-offer. Soltani proposed CX Digital provide 2,000 Sales per day and that CX Digital be the AOR or agent of record..., a term of art meaning the exclusive provider of affiliate advertising on the advertising campaign.... Touris makes a simple counter-offer that there be no limit on the number of Sales per day that CX Digital's affiliates may generate ... and makes no mention of the AOR term. Soltani enthusiastically accepts the counter-offer by writing, "awesome!" ... and by beginning to perform immediately by increasing the volume of Sales
So, for those of you interested in contract law, let this be a simple lesson in what it takes to form a contract... and, yes, it is kind of awesome.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    abc gum, Apr 1st, 2011 @ 4:47am

    This gives opt out tons of awesome

     

    reply to this | link to this | view in thread ]

  2.  
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    Rekrul, Apr 1st, 2011 @ 6:21am

    So does this mean I have a valid contract for unlimited use of my AT&T U-Verse account due to the fact that every employee I spoke to, told me it was unlimited and would remain that way?

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Jean-Marc Liotier (profile), Apr 1st, 2011 @ 6:36am

    In French contract law, no specific formalism is required for contracts with value less than 1500 or when the object of the contract is a commercial operation between professionals. So this case would probably be judged the same way in France.

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    Greg G (profile), Apr 1st, 2011 @ 6:58am

    Re:

    Probably not if it was just spoken.

    Next time you contact them, do it via IM/Email/their website (if they have live CS), and if they type that magic word "unlimited" then you have 'em.

     

    reply to this | link to this | view in thread ]

  5.  
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    Qritiqal (profile), Apr 1st, 2011 @ 7:04am

    Re:

    NO LIMIT

     

    reply to this | link to this | view in thread ]

  6.  
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    crade (profile), Apr 1st, 2011 @ 7:10am

    Re: Re:

    Awesome!

     

    reply to this | link to this | view in thread ]

  7.  
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    crade (profile), Apr 1st, 2011 @ 7:20am

    Man, dude got screwed. From that snippet it doesn't sound like he's agreeing to anything. It's most likely just short for "That would be awesome!"

    By clicking anywhere on your screen, you agree to be bound by all the terms of this contract and pay me 4000$/day for the next 4 years.

     

    reply to this | link to this | view in thread ]

  8.  
    icon
    Hiiragi Kagami (profile), Apr 1st, 2011 @ 7:22am

    I was taught an important lesson growing up.

    My dad always enforced upon me to watch what I put in writing because it's legally binding to me. Doesn't matter what it is.

    Digital ink has been accepted as the same thing, and it's why people can be held accountable for anything stated, even businesses.

    So consider this little FYI as some of you ACs go around pretending you're not bound by what you say.

    As for the article, this wasn't surprising. There was another case a few years ago where someone's AOL Instant Messenger chat was also taken as a contract in the making.

    Though, I like the previous comment regarding the AT&T example and has reminded me perhaps rather than call on the phone, I start utilizing any written form of communication more often.

    *cuts phone cord.

     

    reply to this | link to this | view in thread ]

  9.  
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    DannyB (profile), Apr 1st, 2011 @ 7:31am

    Re:

    You can't go to court. (Supposedly)

    AT&T uses binding arbitration which you agreed to.

    Naturally this arbitration will be completely "fair and balanced".

    You *could* file in court first, but I would predict AT&T would move the court to dismiss and send it to arbitration based on your agreement. The court, delighted to get this off of its already overloaded docket, would agree it should go to arbitration so that AT&T can dispose of your complaint more efficiently.

     

    reply to this | link to this | view in thread ]

  10.  
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    DannyB (profile), Apr 1st, 2011 @ 7:35am

    So text message contracts are okay, but oral representations mean nothing

    So what if the oral representation is recorded?

    Does that count at "digital ink"? Probably not.

    Even a written representation in a text message might not be seen as binding by some courts. After all a big company (example AT&T) might say that the person who made such text message representation was not authorized to do so and it is therefore not binding upon AT&T.


    AT&T: Rethink Pessimism

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Anonymous Coward, Apr 1st, 2011 @ 8:05am

    Bear in mind that the laws governing contracts vary state by state. According to Mr. Goldman, apparently the law of contracts in Delaware has a unique provision concerning subsequent amendments/modifications to contracts.

    This seems to be a case outside the norm, so unless a state has a counterpart law to that of Delaware the case is of modest interest.

    This just goes to point out why "Governing Law" provisions in contracts are more than just boilerplate.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, Apr 1st, 2011 @ 8:36am

    The problem I see is the informality of language when texting.
    No punctuation for example.
    Does no limit mean "You want no limit?
    or "No, limit."
    etc.

     

    reply to this | link to this | view in thread ]

  13.  
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    Anonymous Coward, Apr 1st, 2011 @ 8:55am

    awesome!

     

    reply to this | link to this | view in thread ]

  14.  
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    Anonymous Coward, Apr 1st, 2011 @ 10:15am

    Re: Re: Re:

    Winning!

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Anonymous Coward, Apr 1st, 2011 @ 10:30am

    Re:

    Did they tell you before or after the contract you signed?

    Did you say, I want this that I don't have, and they said OK?

    What may surprise people is that 7+ figure deals are often done by phone conversation. I sat in on a trial for a guy that sold 4.5 million in stocks across national lines on a phone call, and when he couldn't produce (he thought he owned stocks, but he owned a CLO), he was taken to court. The only novelty of the case was that he was so wrong, that it shouldn't even have gone to trial.

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    Anonymous Coward, Apr 1st, 2011 @ 11:06am

    Re: So text message contracts are okay, but oral representations mean nothing

    I'm pretty sure that if a reasonable party thought the person was authorized it's binding.

    So a low level rep for example, could not sell you AT&T, but if they said 6 free months service for our mistake, it would definitely bind.

    Spoken (even if not recorded) is binding too, but it's a lot harder to prove.

     

    reply to this | link to this | view in thread ]

  17.  
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    The Groove Tiger (profile), Apr 1st, 2011 @ 12:16pm

    Re:

    It confused me too, because who's saying what can be mixed up. It went like this:

    Affiliate: instead of the 200 limit, how about you grant me a 2000 limit.

    Parent: NO LIMIT

    Affiliate: awesome


    It's the parent company who took what the Affiliate asked and went a step further, removing the limitations on Affiliate. So Affiliate didn't get screwed, they got an even better deal than what they asked. It's Affiliate who yelled "awesome", because Parent actually removed a restriction from them.

     

    reply to this | link to this | view in thread ]

  18.  
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    Chargone (profile), Apr 1st, 2011 @ 5:37pm

    Re:

    IMs are not txt messages. not by default anyway. all this proves is that punctuation and grammar are important :P

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    rose love, Apr 10th, 2011 @ 9:30am

    Re:

    am a pal looking for a a date.

     

    reply to this | link to this | view in thread ]


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