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Businesses must now get explicit permission to add unrelated provisions to contracts after the fact, judge rules
DETROIT Consumers recently had their day in court... and won.
For years, big companies have mailed their customers confusing amendments to already signed contracts. The companies inform their customers, in very small print, that continued use of the product signals acceptance of the new provisions.
Thus, for instance, credit card companies have been able to add provisions stripping customers of important rights, like the right to file a lawsuit in court. If the customer doesn't explicitly refuse the changes in writing, the changes go into effect.
The courts have condoned this practice, 
known as "silence-as-acceptance," for many years. This week, however, Detroit-area law firm Goren, Goren, Goren & Harris, P.C. won a significant battle in the war for consumers' rights when a Michigan trial court judge agreed to nullify a credit card company's arbitration clause that prohibited customers from bringing a lawsuit against the company.
"This is a major win for consumers everywhere," said lead plaintiff attorney Steven E. Goren. "The idea of silence-as-acceptance has been slowly creeping its way into our law as a way for businesses to defeat consumers' rights."
In oral arguments before Judge Daphne Means Curtis of the Wayne County Circuit Court, Goren offered a more tangible example to demonstrate the problems with "silence-as-acceptance": Should a credit card company have the right to add magazine subscriptions to its customers' contracts in the same manner? If the Court deemed appended arbitration clauses acceptable, logic dictates additional unrelated additions - such as magazine subscription clauses - would be allowed as well.
Judge Curtis appreciated his points.
"Now," Goren said, "consumers have to explicitly agree - rather than explicitly disagree - before new, unrelated conditions are added to a contract."
The credit card company, Fleet Bank, had added an arbitration clause to its credit card contract for existing customers. This clause waived its customers' right to participate in a class action, to go to court for any dispute, and more. In effect, this provision insulated Fleet from liability for its own deceptive promotions and other wrongdoing.
Plaintiff argued that Fleet had no right to deem continued use of a credit card to be acceptance of the new terms and conditions. Plaintiff also argued that the new agreement was unconscionable, and should not be enforceable. Judge Daphne Means Curtis has recently released an eight-page opinion agreeing with the plaintiff.
"Big companies have started using arbitration clauses to immunize themselves from liability for deceptive practices," said Plaintiff counsel Henry Langberg. "With this ruling, David truly has won a battle against Goliath."
The fight over silence-as-acceptance was part of a lawsuit alleging Fleet Bank's "Air Check" promotion was deceptive. Fleet had sent flyers to its customers offering up to $100 off on air travel. Only after buying a plane ticket and receiving nowhere near $100 did the Michigan plaintiff realize there were many restrictions that had gone undisclosed on the initial promotion flyer. Goren, Goren & Harris, P.C. is currently seeking class action certification for the lawsuit.
