Another Example Of Why Online-Only Agreements Are Preferable

Richard Raysman is a Partner in the New York office.

Despite the increasing propensity of clickwrap agreements to include boilerplate language alongside the icon or button to be clicked, such as "By signing this form, you agree to all Terms and Conditions associated therewith," some entities continue to, whether intentionally or not, refuse to fall in line. As the following case illustrates, the absence of both this language and of an online-only user approval process can doom the enforceability of other contracts referenced by the clickwrap agreement. See Holdbrook Pediatric Dental, LLC v. Pro Computer Service, LLC, No. 14-6115 (NLH/JS), 2015 WL 4476017 (D.N.J. July 21, 2015)

Facts

Holdbrook Pediatric Dental, LLC (Holdbrook) operates a pair of pediatric dental practices in New Jersey. In April 2014, Holdbrook entered into an agreement with Pro Computer Service, LLC (PCS), whereby the latter would provide IT services to Holdbrook in exchange for a monthly fee.

On July 24, 2014, a representative of Holdbrook informed PCS that the company was displeased with PCS' services. Approximately 15 minutes later, PCS allegedly remotely accessed Holdbrook's computers and created new network passwords that it would not thereafter provide to Holdbrook. As a result, Holdbrook was locked out of its server, and despite a demand to PCS, Holdbrook's network was not restored until the next day. Holdbrook averred that while it was locked out of its network, it could not access its electronic records, including patient files, thereby forcing it to cancel 83 previously scheduled appointments for that day and the next.

In October 2014, Holdbrook sued PCS in part pursuant to the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030 et seq., based upon its contention that PCS knowingly transmitted into its network a "program, information, code, or command" that intentionally caused damage without authorization to a protected computer. Five days subsequent to the filing of this action, PCS filed a demand for arbitration with the American Arbitration Association (AAA). PCS claimed that the Managed Support Plan (the Plan) signed by Holdbrook ante to the beginning of the relationship included a mandatory arbitration clause.

The Plan did not itself include such a provision, and instead, the mandatory arbitration provision is contained in an independent Terms and Conditions document (the Terms). PCS argued that the Terms were automatically integrated into the Plan...