Acknowledging Receipt of an Email Doesn’t Form a Contract–Stebbins v. Wal-Mart

By Eric Goldman

Stebbins v. Wal-Mart Stores Arkansas, LLC, 2011 WL 1519390 (W.D. Ark. April 14, 2011). Lawsuits like these tend to be associated with repeat users of the judicial process; see the Justia Arkansas page for other lawsuits possibly from this plaintiff.

From the complaint allegations: Stebbins has Asperger’s. He applied for a job at Wal-Mart and took a computerized assessment, which he says disproportionately hinders applicants with Asperger’s. Despite having “failed” the assessment, he believes there were jobs at Wal-Mart that he could perform, such as janitor or night shelf-stocker. The case doesn’t say it explicitly, but I infer Wal-Mart nevertheless dinged his job application.

Stebbins emailed Wal-Mart customer care with the following:

Notice to companies

My name is David Anthony Stebbins, and I live in Harrison, AR. I am sending a link to this webpage to various companies to put you on notice. If you contact me in any way, shape, or form, you hereby acknowledge that you have read, understand, and agree to be legally bound by the terms below.

…

You hereby agree that you, as well as any principal or employer that you are acting on behalf of, will initially attempt to settle all legal disputes, even those not relating to this contract by semi-binding arbitration using the services of www.net-arb.com, where you are bound but I am not.

(You can see the full contract at Stebbins’ MySpace page, although recognize that visiting the page might create an extra degree of legal risk. This web page would make an excellent exam Q. Among other contract formation techniques, the terms say “This [contract] will also take effect if I attempt to contact you, and, upon hearing my name, you do not cease communications with me on the spot.” Among the contract’s terms: “You hereby agree to never: * Interrupt me when I am speaking, for all eternity. * Hang up on me in any phone call, for all eternity. * Block my attempts to communicate with you, for any reason, for all eternity. * Ask me a question that I have previously answered, for all eternity. * Demonstrate any rudeness, annoyance, or disrespect, however petty, against me, for all eternity.” The “for all eternity” duration raises some interesting questions about post-mortem breach and enforcement. I also liked this line: “If you even so much as attempt to litigate a case with me, even if that attempt is unsuccessful, you automatically loose that case.”)

OK, back to the lawsuit. Wal-Mart’s customer care sent an apparently canned reply to Stebbins’ email suggesting he contact a different department. Stebbins followed up with this email:

On November 8, 2010, I sent you a formal contract offer, via email. The email stated that, if you initiate communications with me, or if I initiate communications with you, and you entertain said attempt to communicate, you are bound by that contract.

You accepted that offer on November 11, 2010, when I purchased a gallon of milk from you, using a paper check. This check had my name and street address on it, so you knew who I was. Also, your employees asked me to see my ID, and I showed them my driver’s license, so you had every opportunity to know who I was, then….

So, now, we must hold all legal disputes via arbitration, whether you like it or not!

Consistent with another provision of his purported contract on MySpace, Stebbins now asserts “since Wal–Mart did not accept the arbitration invitation within twenty-four hours of receiving it, he automatically wins regardless of the merits of the case and is entitled to an award of six-hundred billion dollars.”

(Not that it really matters, but Wal-Mart’s market capitalization today is $186B. Perhaps Stebbins would have found more litigation success if he had kept his damage request south of 100% of Wal-Mart’s market cap. 3X its value was probably too much to ask for.)

Needless to say, Stebbins’ attempted contract formation failed. In an unwaveringly straight-laced opinion, the court says:

Plaintiff maintains Wal–Mart accepted the contract by its “act” of replying to his e-mail….The e-mails from Plaintiff are self-serving documents that did not form the basis for any conduct or performance on Wal–Mart’s part….In this case, Wal–Mart performed no act. It merely replied to two e-mails by directing the Plaintiff to the correct department. It performed no service and Plaintiff made no promise.

This result reminded me of the tactic used by Suzanne Shell, initially covered in a John Ottaviani blog post. She placed a notice on her website that popped up whenever anyone (including a robot) visited it, purporting to bind visitors simply by visiting her site. A court ultimately rejected this contract formation process. Contract-like terms buried in email footers are similarly ineffective (see also this post).

I like this ruling because it’s a good reminder for everyone (especially contracts students prepping for their imminent finals) that courts tend to reject overly formalistic/tendentious approaches to contract formation. A contract does not exist simply because you can see things that you claim are an offer or acceptance. Ultimately, there needs to be a manifestation of assent to bind a party to a contract. A canned reply from a CSR should not manifest such assent, even if it was purportedly bargained for.

Having said that, I wonder if companies would benefit from training their CSRs not to reply to any email that purports to create some obligation simply by replying to the inquiry. I know that a non-response can be a harsh remedy, but companies have already learned the importance of not being too responsive from the Barnes v. Yahoo case. Here, Wal-Mart might have been better off simply deleting an email that contained the threat of contract formation simply by replying. (Of course, Stebbins probably would have still asserted contract formation from his purchase of a gallon of milk, paid by check). As counter-intuitive as it may seem for people in the business of providing customer service, this may be a situation where silence was golden.