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DeJohn v. The .TV Corporation International, et al.

Click-Wrap Agreement Entered Into By Clicking "Accept" Icon Immediately Below Link To Terms of Contract

Court holds that plaintiff entered into a binding online click-wrap agreement by clicking an 'I Agree' icon, which indicated he had read, understood and agreed to the terms of the parties' contract.  The contract's terms were available for review online by clicking on a link which appeared on the Register.com website just above the 'I Agree' icon.  As a result, the Court dismissed the claims advanced by plaintiff, because plaintiff commenced suit in a forum other than the exclusive jurisdiction specified in the forum selection clause contained in the parties' contract; asserted state law claims under the laws of a state which were rendered inapplicable by the contract's choice of law provisions, and asserted claims that failed in light of the contract's terms.

Plaintiff Entered Into Binding Click-Wrap Agreement

Defendant Register.com Inc. is a domain name registrar.  Register.com submits applications to register .tv domain names to defendant .TV Corporation International (".TV"), a wholly owned subsidiary of defendant Verisign, and the administrator of the .tv top level domain registry.  If the application complies with .TV's requirements, it is accepted, and the domain is registered in accordance therewith.

Plaintiff sought to register certain .tv domains, including business.tv, wallstreet.tv, realtor.tv and sex.tv with Register.com.  Apparently, Register.com mistakenly offered to register such domains for the price of $50 each.  Unfortunately, .TV was unwilling to accept registrations of those domains at that price.

As a condition precedent to these domain registrations, plaintiff was required to enter into a Service Agreement with Register.com.  The terms of this Agreement were available online by clicking on a link which appeared on Register.com's website.  Directly below this link was an "I Agree" icon, indicating that the user had read, understood and agreed to the terms of the contract.  An application to register a domain name could not be processed unless the registrant clicked on the "I Agree" icon.  According to the Court, plaintiff clicked on this icon, and submitted applications to register the .tv domains at issue.

Defendant Register.com initially responded by transmitting e-mails indicating plaintiff had successfully registered the domains.  However, .TV rejected these registrations because the necessary registration fees were significantly higher than the $50 plaintiff had paid.  Register.com promptly notified plaintiff and refunded his money.

This lawsuit followed against Register.com, .TV and Verisign.

The Court held that plaintiff had entered into a binding "click-wrap" agreement with Register.com.  By clicking on the "I Agree" icon acknowledging he had read, understood and agreed to be bound by the contract after being afforded an opportunity to view its terms, plaintiff entered into a binding agreement.  Said the Court:  "The court finds that the Register.com Agreement is valid."

It did not matter that plaintiff had not actually reviewed the terms of the contract.  Said the Court:

[T]hese claims fail because DeJohn had an opportunity to review the terms of the Register.com Agreement by clicking on the hyperlink Register.com provided.  The fact that DeJohn claims that he did not read the contract is irrelevant because absent fraud (not alleged here), failure to read a contract is not a get out of jail free card.  See Tatar v. Elite Gold, Inc., No. 01 CIV. 2433(RLC), 2002 WL 2031605 at *3 (S.D.N.Y. Sept. 5, 2002) ("If the signer could read the instrument, not to have read it was gross negligence; if he could not read it, not to procure it to be read was equally negligent; in either case the writing binds him.").  The same rules applies to electronic contracts.

In holding the parties bound by the Register.com contract, the Court rejected plaintiff's claims that the agreement was unenforceable because it was ambiguous and a contract of adhesion.

Court Dismisses Suit And Upholds Forum Selection Clause

Because the contract mandated suit be brought against Register.com exclusively in New York, and plaintiff commenced suit in Illinois, the Court dismissed plaintiff's breach of contract claims against Register.com for improper venue.  The Court also dismissed claims plaintiff raised for violations of Illinois Consumer Fraud and Deceptive Practices Act, and Illinois Uniform Deceptive Trade Practices Act, because the parties' contract dictated that New York law governed their dispute.  Accordingly, held the Court, plaintiff must seek relief under the  statutes of New York, and not those of Illinois.

The Court also dismissed plaintiff's claims against .TV.  Plaintiff's contract with Register.com incorporated by reference the terms of the .TV Registration and Services Agreement.  This Agreement gave .TV the right to reject a domain registration request for any reason, in its sole discretion.  The Court held that these contractual provisions doomed plaintiff's claims, as .TV thus had no obligation to accept plaintiff's registration application, particularly for an unacceptably low registration fee.  Moreover, any fault lay with Register.com's apparent offer to register the domain names for $50, which was neither made by, nor on behalf of, .TV.

Finally, the claims against Verisign, predicated on nothing more than its status as .TV's parent, were also dismissed.  Absent something more, a parent is not liable for its subsidiaries' actions.