Business Law Jeremy lived in California and owned an AT&T cell phone for 5 years
ID: 394602 • Letter: B
Question
Business Law
Jeremy lived in California and owned an AT&T cell phone for 5 years. However, when AT&T kept raising his fees he became upset and decided to sue AT&T contending that its service agreements were not enforceable under California state law. He also moved to create a class-action lawsuit, in which his claims would extend to similarly affected customers. He contended that AT&T had improperly charged him fees beyond the advertised price of service and charge him for roaming calls that should not have been classified as roaming. AT&T moved to force arbitration in accordance with provisions that were clearly set forth in the service agreement. The agreement also specified that no class-action lawsuit could be brought, so AT&T asked the court to dismiss the class-action request. Using the principles we have discussed and in the IRAC Format, discuss whether Jeremy's only course of action is to go to arbitration
Explanation / Answer
Issue - Service Agreement between AT&T and its consumers; consumers being charged beyond advertised price
Rule - Oral contracts are permitted by the California Civil Code; if Jeremy was informed of the charges through a phone call, or, text then the contract is enforceable unless he chooses not to go ahead with the agreement. An informal exchange can be binding, and, legally enforceable.
If the signed service agreement at the time of purchase of cellphone says that only arbitration can be used in case of dispute, then, it is the only course of action.
If there was no communication, verbal or written, in the form of a text or a phone call; then it is not enforceable owing to lack of consideration.
Analysis - Jeremy can go for arbitration. There cannot be a class action suit if the service agreement mentions it. If the change in charges, and, information on roaming charges being applied was not texted, or, informed over the phone; it is not a valid service agreement.
Conclusion - Jeremy & AT&T can opt for arbitration. A written contract as signed initially. After this, electronic communication, and, an oral contract are enforceable. If Jeremy was not informed, the service agreement is not enforceable.
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