Mary DeFontes bought a computer and a service contract from Dell Computers Corp. DeFontes was charged $950.51, of which $13.51 was identified on the invoice as 'tax'. This amount was paid to the state of Rhode Island. DeFontes and other Dell customers filed a suit in a Rhode Island state court against Dell, claiming that Dell was overcharging its customers by collecting a tax on service contracts and transportation costs. Dell asked the court to order DeFontes to submit the dispute to arbitration.
Dell cited its Terms and Conditions Agreement, which provides in part that by accepting delivery of Dell's products or services, a customer agrees to submit any dispute to arbitration. Customers can view this agreement through an inconspicuous link at the bottom of Dell's website, and Dell encloses a copy with an order when it is shipped. Dell argued that DeFontes accepted these terms by failing to return her purchase within 30 days, although the agreement did not state this. Is DeFontes bound to the "Terms and Conditions Agreement?" Should the court grant Dell's request? Why or why not? (DeFontes v Dell Computers Corp., A.2D (R,1,2004)
In responding to the question be sure to:
- Discuss when a court or will/will not enforce a shrink-wrap agreement.
- Discuss when a court will enforce an arbitration agreement.
- Analyze the facts of our scenario and conclude as to whether or not DeFontes will be successful in her lawsuit against Dell.
1. Is Defontes bound by the Terms and Conditions Agreement?
No Defontes is not bound by the Terms and Conditions Agreement because according to a Texas Court in December 2009 ruling. The shrink-wrap agreement was not formed between the Dell Corp. and the plaintiffs' purchasers (www.internetlibrary.com). The Terms and Conditions Agreement is not binding because the agreement accompanied the computer on shipment instead of being acknowledged, during the time of ordering, to the plaintiffs. ...