According to a recent federal court ruling, a telephone customer is bound by the terms of an online business’s privacy policy and terms of use to which the salesperson referred during the call. In Greer v., Inc., No. H-07-2543 (S.D. Tex. Oct. 3, 2007), the U.S. District Court for the Southern District of Texas enforced a forum selection clause contained in the website’s terms of use against a consumer who ordered flowers for his girlfriend on the telephone. Before placing his order, the plaintiff inquired as to the company’s privacy practices and a representative referred him to the company’s online privacy policy. Plaintiff claimed he relied on this policy when he completed his order. The privacy policy clearly stated that it was part of the website’s terms of use, which the plaintiff did not read and which included a forum selection clause.

Plaintiff sued after the company mailed a thank you message to plaintiff’s home address that prompted his wife to ask the company for proof of purchase. Plaintiff alleged that the company then sent his wife a copy of the receipt for the flowers he purchased, the message enclosed with the flowers and his girlfriend’s identifying information. Plaintiff claimed that these disclosures to his wife violated the company’s privacy policy and that the company’s breach of its own privacy policy violated the Texas Deceptive Trade Practices Act. Plaintiff further argued that the Defendants’ improper disclosures caused him damages in connection with his divorce.

Defendants moved to dismiss the plaintiff’s breach of contract action on the basis of the forum selection clause in the website’s terms of use. The district court determined that the clause, which stipulated a New York venue for disputes concerning the website, was both valid and enforceable.  In doing so, the court rejected plaintiff’s argument that the website’s forum selection clause did not apply to his telephone transaction. Judge Nancy F. Atlas first concluded, based on the language of’s online policies, that “[i]t is clear and unambiguous that the Privacy Policy on which Plaintiff bases his lawsuit is part of the Terms of Use containing the forum selection clause.” She then explained that the Terms of Use applied to plaintiff’s telephone order because he was referred to the online privacy policy before completing his transaction and, as stated in the Terms of Use, by accessing the website he agreed to be bound by all relevant terms and conditions. Another Texas decision has suggested that when a consumer who completes a transaction over the phone is not explicitly referred to the website’s privacy policy or terms of use, these terms will not apply to that transaction., L.P. v. Canales, No. 04-05-00315-CV (Tex. App. Feb. 1, 2006). 

Judge Atlas also rejected plaintiff’s alternative arguments that, even if the clause did apply, it should not be enforced because (1) he did not have notice of the provision and (2) it did not figure prominently in the parties’ agreement. According to Judge Atlas, plaintiff received notice that the privacy policy was part of a broader Terms of Use Agreement, which was readily accessible and clearly stated that any claim relating to the website was subject to a forum selection clause. The fact that plaintiff chose not to read the Terms of Use was not grounds for finding them unenforceable.