Hill v. Gateway 2000

105 F.3d 1147 (7th Cir. 1997)

 

RULE:

A contract need not be read to be effective; people who accept take the risk that the unread terms may in retrospect prove unwelcome.

FACTS:

The Plaintiff customers ordered a computer from the suppliers. The computer arrives with a list of terms said to govern, including an arbitration clause, unless returned within 30 days. The customers complained but only after the 30-day period . they filed an action against the suppliers. The suppliers sought enforcement of the arbitration agreement contained in the materials they shipped to the customers. The trial court denied their motion, hence, the appeal.

ISSUE:

Whether the terms inside a box of software binds the customer even if such terms were not read prior to his purchase.

ANSWER:

Yes.

CONCLUSION:

The trial court was directed to compel arbitration. The court stated that a contract did not have to be read in order for it to become effective and that the terms inside a box of software were binding on a consumer who subsequently used it. The court found that rationale was also appropriate to the customers and, therefore, concluded that they were bound by the arbitration clause.

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