Arbitration & Mediation

Third DCA Finds Arbitration Clause on Website Not Enforceable But Merely a "Separate Collateral Document"

By Christopher B. Hopkins, Esq.

It is fairly common for parties to exchange a signed contract which references terms and conditions on a website or other document. Often the website or other document will contain an arbitration clause and venue term. The case of General Impact Glass & Windows, Corp. v. Rollac Shutter of Texas, Inc. is an example of how using a combination of documents/web pages to form a contract does not work.

The parties reportedly did business primarily over the phone and through faxed order forms. Neither the discussions nor the invoices included references to other documents or arbitration. At all times, however, the defendant had a website and a printed catalog which set forth "terms and conditions" for purchases as well as order forms. There was no indication that the plaintiff ever went on the website and there was a dispute whether they received a catalog. None of the order forms exchanged came from the catalog. In short, the plaintiff denied ever knowing about the terms and conditions.

The Third District (Rothenberg, Wells, Langoa) held that there was no valid agreement to arbitrate since the documents exchanged between the parties made no reference to arbitration, the "terms and conditions" were never signed nor expressly incorporated into the deal, and the terms and conditions were simply an un-incorporated separate collateral document. Hence, no arbitration.

Take away lesson? If terms and conditions are to be in a separate document or web page, the signed contract should make clear reference to those terms and incorporate them into the agreement.

Full post as published by Florida Arbitration Law on April 08, 2009 (boomark / email).