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.

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Comments on “Instant Messenger Conversation Modifies Contract; Signed With 'Awesome'”

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DannyB (profile) says:

Re: 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.

Anonymous Coward says:

Re: 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.

The Groove Tiger (profile) says:

Re: 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.

Hiiragi Kagami (profile) says:

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.

DannyB (profile) says:

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

Anonymous Coward says:

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.

Anonymous Coward says:

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.

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