Those pesky on-line terms and conditions strike again. James May listed his vacation rental property on HomeAway, an online marketplace for vacation rentals. Originally HomeAway only charged the owner and not the traveler. In 2016, HomeAway, which was acquired by Expedia, changed its policy to charge both the owner and the traveler. In 2016, James renewed the HomeAway subscription. Actually he renewed it in his wife’s name and not his own name. Then James brought a class action suit against HomeAway/Expedia for breach of contract, fraud, fraudulent concealment, and Oregon and Texas state law claims based on HomeAway’s imposition of a “traveler fee” and its negative effect on owners who used HomeAway to rent properties. The terms and conditions of the on-line agreement required arbitration for all disputes. So HomeAway/Expedia brought a motion to compel arbitration. James opposed the motion arguing that because he renewed in his wife’s name, he wasn’t bound by the arbitration clause in the terms and conditions. The magistrate judge hearing the case quickly disposed of this argument. First, the terms and conditions didn’t allow assignment of the agreement without HomeAway/Expedia’s permission. Second, the magistrate held that James had notice of the terms and conditions and so he was bound by them. The magistrate judge made a recommendation to the district court judge to enter an order granting the motion to compel arbitration.
WHY YOU SHOULD KNOW THIS. Online terms and conditions are enforceable as long as the party enforcing them can show consent by the other party. In this case, HomeAway/Expedia showed consent with two things. First, James renewed. Second, James booked a property through HomeAway/Expedia. James initiated the class action lawsuit with both hands tied behind his back. One hand was tied by his failed attempt to get around the terms and conditions. The other hand was tied by the enforceability of online terms and conditions.