Friday, October 10, 2008

AT&T Takes Care of Itself

Posted: Friday, October 10 at 06:00 am CT by Bob Sullivan

AT&T reserves the right to change its terms of service by sending its Internet service customers an e-mail. Apparently, it also reserves the right to deposit those e-mails into its customers’ junk mail folders.

Last month, AT&T made some controversial changes to its Internet policies. Verbiage indicating that high-bandwidth users might experience some intentional slowdowns irritated some techies; another section that forces customers to use binding arbitration to resolve disputes annoyed consumer organizations; and an L.A. Times reporter bristled at the size of the full new agreement -- 2,500 pages.

But Lance Mead, an AT&T Internet customer from Encino, Calif., almost missed the entire controversy. His notification of the new terms of service was sent via e-mail on Sept. 18, but AT&T's own spam filters trapped the e-mail as spam and deposited it in his junk mail folder, he said. On a whim, he checked the folder and spotted the notice. He was furious.
Still, on AT&T's Web site, the burden is placed squarely on the consumer to spot and read such e-mails. Failure to read them will be interpreted as consent to the new contract terms. The firm even reserves the right to announce price increases by e-mail.

"From time to time, we may change this agreement, the site, or service, including the rates and charges," AT&T's legal policy states. "It is your responsibility to check your e-mail address for any such notices. Your continued subscription to the service after receipt of such notice constitutes your acceptance of such changes."

Consumer attorney Paul Bland, who often litigates cases contesting binding arbitration clauses like the one that arrived in Mead's e-mail, said courts generally hold that a single e-mail notice can indeed create a binding contract.

"It's a lousy way to send it out, but unfortunately the vast majority of courts have held that this kind of notice is enough to create a binding contract," he said. "I think that courts are stuck in this 19th century vision of contracts being something that are formed when two sophisticated people sit down at a table and haggle out terms, and the transfer of standard form rules by e-mails, in settings where no one will read them, highlights ... the need for a new paradigm of contract law."

Bland said AT&T’s notice was an extreme case, however, and a court might be convinced to rule that a contract had not been formed if "the corporation itself did something that caused the e-mail not to go through."

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