Get the Message? Court Enforces Arbitration Agreement Accepted by Text Message
It’s amazing what you can do over text these days. Order a pizza? Sure. Arrange childcare? Yep. Bind yourself to arbitration with a debt collector? You betcha.
In Storace v. Lexington, No. 1:18-cv-01596-DAD-SKO, 2019 U.S. Dist. LEXIS 108155 (E.D. Cal. June 27, 2019) the Plaintiff contacted Lexington—apparently a debt collector—to repair his credit. (I don’t get it either.) His inquiry prompted Lexington’s marketing company—since when does a debt collector have a marketing company?— to send Plaintiff a text message containing a contract, of some sort, which Plaintiff accepted, for some reason, by texting “Agree.” The agreement contained an arbitration provision, which Defendant moved to enforce.
The Plaintiff opposed the motion arguing, in essence— c’mon, you can’t agree to arbitration over text. The Court disagreed.
Recognizing that the agreement containing the arbitration provision was included within the text message and the Plaintiff could have easily reviewed the terms by clicking the link, the Plaintiff’s decision to say “Agree” manifested his mutual assent and understanding of the critical terms. Thus a binding contract was formed. The Court went on to determine that the arbitration agreement was not unconscionable, although it was extremely broad. (Notably the Court found the degree of procedural unconscionable inherent with sending a consumer a baked adhesion contract over text message to be only “minimal.”)
So there you go—contracts can be accepted via text message. Professor Corbin eat your heart out. Happy weekend TCPAWorld.