Harris v. Blockbuster, Inc.

Harris v. Blockbuster, Inc., 622 F.Supp.2d 396 (N.D. Tex. Apr. 15, 2009)[1] established precedent in the district that when a contract has a clause that authorizes one party to make changes to the "contract" without notification, that it is illusory and hence the entire "contract" is void.

Judgment

On April 15, 2009, the District Court for the Northern District of Texas ruled that Blockbuster Online’s Terms and Conditions were unenforceable because they gave Blockbuster too much discretion in modifying the terms of the agreement. Following the reasoning in a Fifth Circuit case, Morrison v. Amway Corp., and consistent with a Ninth Circuit case, Douglas v. US District Court ex rel Talk America[2] the court found that Blockbuster’s arbitration provision was illusory, because there was nothing in the Terms and Conditions that would prevent Blockbuster from “unilaterally changing any part of the contract.”

Significance

Some websites' "terms and conditions" may be deemed an illusory contract and unenforceable if the language can be changed at any time by the company without notifying users and giving them a chance to reject the new changes.

See also

Notes

  1. ↑ http://amlawdaily.typepad.com/Blockbusterdecision.pdf
  2. ↑ No. 06-75424 (9th Cir. July 18, 2007)
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