## Facts

- AT&T offered “U-verse,” a bundled service including digital television, voice-over-Internet protocol voice service, and high-speed Internet, sold either individually or in discounted bundles.
- TV/Voice service was governed by printed terms provided at installation and accepted through a technician’s laptop screen requiring the customer to check an acceptance box before installation proceeded.
- The TV/Voice terms included a forum-selection clause requiring disputes to be brought in courts located in Bexar County, Texas.
- Internet service was governed by separate terms presented during online registration; customers could not use the service without acknowledging agreement to the terms.
- The Internet terms included an arbitration clause requiring arbitration of disputes and claims based in whole or in part on Internet service, on an individual (non-class) basis.
- For some Internet subscribers who enrolled before the arbitration clause was added, AT&T notified them by email of the added clause and stated that continued use would constitute acceptance.
- Plaintiffs filed suit in federal court in Oklahoma, including a civil RICO claim, alleging dissatisfaction with U-verse service.
- AT&T moved to dismiss based on the forum-selection clause (TV/Voice) and the arbitration clause (Internet), and the district court dismissed the action.

## Issues

1. Whether the TV/Voice click-wrap acceptance process and proof of AT&T’s standard installation procedures established that plaintiffs assented to a mandatory forum-selection clause requiring suit in Bexar County, Texas.
2. Whether the Internet click-wrap process, and email notice plus continued use by existing subscribers, established assent to an arbitration clause covering disputes based in whole or in part on Internet service.
3. Whether the district court properly dismissed (rather than transferred or retained) claims subject to the forum-selection clause and arbitration clause.

## Decision

- The Tenth Circuit affirmed the dismissal.
- The court held the TV/Voice forum-selection clause was enforceable and required litigation in courts located in Bexar County, Texas.
- The court held the Internet arbitration clause was enforceable and required arbitration of covered disputes on an individual basis.
- The court accepted AT&T’s evidence of customary and routine procedures as sufficient to show contract formation and assent.
- The court found no reversible error in the district court’s interpretation and enforcement of the contractual provisions and no abuse of discretion in dismissing the case.

## Legal Principles

- Click-wrap agreements are enforceable where the customer receives reasonable notice of terms and must take an affirmative step (such as checking a box or acknowledging on-screen) to obtain service.
- A party’s failure to read or remember terms does not defeat contract formation when assent is manifested through required acceptance mechanisms.
- Evidence of a company’s standard business practices may be used to establish that assent procedures were followed and that an agreement was formed.
- Mandatory forum-selection clauses are generally enforced absent a supported contract defense that would justify nonenforcement.
- Contract modifications communicated to existing customers may be binding where the customer receives notice and continued use is treated as acceptance under applicable contract rules, as applied to the presented facts.
- Arbitration provisions in consumer service agreements may be enforced to require individual arbitration of covered disputes when validly formed and applicable to the claims.

## Conclusion

The court enforced AT&T’s U-verse terms as binding contracts formed through click-wrap acceptance and notice-based modification, requiring TV/Voice-related litigation in the contractually chosen Texas forum and Internet-related disputes to proceed in individual arbitration, and it affirmed dismissal of the Oklahoma action.


Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248 (10th Cir. 2012)