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Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997)

Summary

This decision follows the holding of ProCD, upholding the validity of a "approve or return" trigger for setting the terms of a shrinkwrap license, even though the consumer claimed not to have read the statement of terms with regard to the specific clause at issue.

Analysis

In Hill, the court adopted the analysis of ProCD in an action by purchasers of a computer against the computer manufacturer. At issue was the enforceability of an arbitration agreement between the parties where the arbitration clause was included in a set of terms sent to the buyer in the box in which computer was shipped which also stated that the buyer agreed to accept the terms unless the customer returned the computer within 30 days. The plaintiffs contended that they had not read the statement of terms closely enough to discover the agreement to arbitrate before the 30 days expired but the court rejected this, noting that "a contract need not be read to be effective." As in ProCD, the court approved the enforceability of the "approve or return" device for setting terms, again relying on the fact that there are "many commercial transactions in which people pay for products with terms to follow." The customers should have anticipated that additional significant terms would be included with the product and, by keeping the product more than 30 days, accepted the manufacturer's offer and terms.


Copyright SRBC 1998 up