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Case Citation
Legal Case Name

Harris v. Blockbuster Inc. Case Brief

District Court, N.D. Texas2009Docket #2240524
622 F. Supp. 2d 396 2009 U.S. Dist. LEXIS 31531 2009 WL 1011732 Contracts Civil Procedure E-Commerce Law

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Case Brief Summary & Legal Analysis

General Brief
3 min read

tl;dr: A federal court found Blockbuster’s arbitration clause unenforceable because its online terms allowed Blockbuster to unilaterally change the agreement at any time. This unrestricted power to modify rendered its promise to arbitrate illusory and non-binding.

Legal Significance: This case demonstrates that a unilateral right to modify a contract, common in online terms of service, can render an arbitration provision illusory for lack of consideration unless it contains a “savings clause” preventing retroactive application to accrued disputes.

Harris v. Blockbuster Inc. Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Plaintiff Cathryn Harris, a Blockbuster Online customer, filed a class action lawsuit alleging Blockbuster violated the Video Privacy Protection Act by sharing her movie rental history with Facebook through its “Beacon” program. To use the online service, customers had to agree to Blockbuster’s “Terms and Conditions” via a clickwrap agreement. These terms included a mandatory arbitration clause. However, a separate provision in the terms, under the heading “Changes to Terms and Conditions,” stated that Blockbuster could, “at its sole discretion, modify these Terms and Conditions… at any time… with or without notice.” It further specified that such modifications would be “effective immediately upon posting.” When Harris sued, Blockbuster moved to compel individual arbitration based on this agreement. Harris countered that the arbitration provision was unenforceable because Blockbuster’s unilateral right to modify the entire contract at any time made its promise to arbitrate illusory.

Court Holding & Legal Precedent

Issue: Is an arbitration agreement contained within a larger contract illusory and unenforceable when the contract grants one party the unilateral right to modify the terms at any time, with changes effective immediately, without a clause preventing retroactive application to disputes that have already arisen?

Yes. The court held that the arbitration provision was illusory and therefore Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate

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IRAC Legal Analysis

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Legal Issue

Is an arbitration agreement contained within a larger contract illusory and unenforceable when the contract grants one party the unilateral right to modify the terms at any time, with changes effective immediately, without a clause preventing retroactive application to disputes that have already arisen?

Conclusion

This case provides a clear warning that standard-form consumer contracts granting a Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure do

Legal Rule

Under Texas law, as interpreted by the Fifth Circuit, an arbitration agreement Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolo

Legal Analysis

The court's analysis centered on the doctrine of illusory promise, applying the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui offic

Flash-to-Full Case Opinions

Flash Summary

  • The court denied Blockbuster’s motion to compel arbitration, finding the arbitration
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore

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