Day in and day out, Internet users sign various forms of agreements for a variety of reasons, from joining a dating site, to participating in an online auction, to uploading media to a storage locker. These agreements, sometimes known as browse-wrap or click-wrap agreements, are necessary to memorialize and expedite the use of a website pursuant to well-defined rules. More often than not, these agreements substitute for more “traditional” contracts, and they are thus construed as such when contested in court.
A fundamental question intrinsic to contracts is whether an enforceable agreement exists at all. A dispute over the enforceability of an online agreement, and the arbitration provision therein, arose recently in state court in Texas. See Momentis U.S. Corp. v. Weisfeld, No. 05-13-01250-CV (Tex. App. July 23, 2014).Momentis involved a dispute between a marketing company and two of its “independent representatives.”
To sell its products, Momentis U.S. Corp. (Momentis) contracted with third-party independent contractors called independent representatives (IRs). Bishop and Weisfeld (collectively, Plaintiffs) signed up to be IRs. In order to be accepted as such, prospective IRs must complete and sign Momentis’ IR agreement (the Agreement), Policies & Procedures, and submit an application fee. Once the prospective IR pays the application fee, Momentis