Harris V. Blockbuster, Inc.
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''Harris v. Blockbuster, Inc.'', 622
F. Supp. 2d The ''Federal Supplement'' ( is a case law reporter published by West Publishing in the United States that includes select opinions of the United States district courts since 1932, and is part of the National Reporter System. Although the ''F ...
396 (N.D. Tex. 2009), 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.


Background

Blockbuster Blockbuster or Block Buster may refer to: *Blockbuster (entertainment) a term coined for an extremely successful movie, from which most other uses are derived. Corporations * Blockbuster (retailer), a defunct video and game rental chain ** Bl ...
operated a service called Blockbuster Online that allows customers to rent movies through the internet and entered a contract with Facebook to disseminate customers' movie choices through social media on
Facebook Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
, where Facebook broadcast a customer's movie rental choice to their Facebook friends when a video rental transaction is made. The plaintiffs claim that agreement with Facebook violates the
Video Privacy Protection Act The Video Privacy Protection Act (VPPA) is a bill that was passed by the United States Congress in 1988 as and signed into law by President Ronald Reagan. It was created to prevent what it refers to as "wrongful disclosure of video tape rental ...
, which prohibits video service providers from disclosing personal identifiable information without consent. Blockbuster attempted to invoke an arbitration provision that customers agreed to in the "Terms and Conditions" when joining Blockbuster Online. The provision waives the right of its users to commence any class action and allowed Blockbuster to reserves the right to modify the "Terms and Conditions" at its sole discretion and at any time. The plaintiffs argued that the arbitration provision was unenforceable because it was illusory and
unconscionable Unconscionability (sometimes known as unconscionable dealing/conduct in Australia) is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining ...
. Blockbuster issued a
motion to compel A motion to compel asks the court to order either the opposing party or a third party to take some action. This sort of motion most commonly deals with discovery disputes, when a party who has propounded discovery to either the opposing party or a t ...
individual arbitration.


Judgment

On April 15, 2009, the District Court for the Northern District of Texas denied Blockbuster's motion to compel and 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. ''Morrison v. Amway Corp.'' 49 F. Supp. 2d 529 was a lawsuit concerning the enforcement of a contractual arbitration provision between the defendant Amway Corp. and the plaintiff their distributors. Background Amway distributors earn their incom ...
'', and consistent with a Ninth Circuit case, '' Douglas v. U.S. District Court ex rel Talk America'' the court found that Blockbuster's arbitration provision was illusory and unenforceable, because there was nothing in the Terms and Conditions that would prevent Blockbuster from "unilaterally changing any part of the contract", "at its sole discretion" and "at any time."


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

*
Electronic Privacy Information Center Electronic Privacy Information Center (EPIC) is an independent nonprofit research center in Washington, D.C. EPIC's mission is to focus public attention on emerging privacy and related human rights issues. EPIC works to protect privacy, freedom o ...
, which filed an ''amicus'' brief in the case *
Illusory promise In contract law, an illusory promise is one that courts will not enforce. This is in contrast with a contract, which is a promise that courts will enforce. A promise may be illusory for a number of reasons. In common law countries this usually r ...


Notes


External links

* {{Blockbuster 2009 in United States case law Licensing United States arbitration case law United States computer case law United States contract case law United States district court cases Blockbuster LLC