FORUM-SELECTION CLAUSE ON WEB PAGE NOT BINDING BECAUSE IT WAS NOT CLEARLY INCORPORATED INTO WRITTEN CONTRACT

Bob Montgomery Chevrolet, Inc. v. Dent Zone Companies
Dallas Court of Appeals, No. 05-12-00307-CV (August 5, 2013)
Justices Moseley, Fillmore, and Myers (Opinion)
Dent Zone, a Texas company, used less-than-clear language to attempt to include in its contract with a Kentucky business a forum-selection clause set out on an internet web page referenced in the parties’ written contract. The Court of Appeals found the language insufficient to incorporate the forum-selection clause into the contract. Because the trial court’s denial of the Kentucky company’s special appearance hinged entirely on its conclusion that the forum-selection clause had been incorporated, the Court of Appeals reversed and rendered judgment, dismissing for want of personal jurisdiction.

Dent Zone provides “paintless dent repair” service. When a severe hailstorm hit the Louisville, Kentucky area, a Dent Zone representative contacted Bob Montgomery Chevrolet in Louisville, to propose that Montgomery become a “certified repair center” in the Dent Zone program, with Dent Zone and Montgomery splitting the proceeds of covered repairs. Representatives of Dent Zone and Montgomery signed a one-page contract formalizing their agreement. That contract, prepared by Dent Zone, stated: “Additional benefits, qualifications and details of the PDR Linx Service Program are available for your review at our website: http//www.linxmanager.com/pdf/CRCTermsConditions.pdf.” The “Additional Terms and Conditions” set out at the link referenced in the contract included a clause selecting Texas law and specifying the courts of the State of Texas and Dallas County as having exclusive jurisdiction and venue in the event of any dispute. After a time, a dispute arose, and Dent Zone brought suit in Dallas County, citing Montgomery’s “consent” to jurisdiction and venue there. Montgomery filed a special appearance, but the trial court denied it, relying on Montgomery’s consent to jurisdiction and venue under the forum-selection clause that it found had been incorporated into the parties’ agreement. The appeals court, however, disagreed.

The Court of Appeals acknowledged that documents or terms incorporated into a contract by reference become part of the contract. Relying on authority from the Texas Supreme Court, the Court noted that “[u]nsigned documents can be incorporated into the parties’ contract by referring in the signed document to the unsigned document,” and that the “language used to refer to the incorporated document is not important as long as the signed document ‘plainly refers’ to the incorporated document.” Further, the court said, these principles apply to the incorporation by reference of internet web pages, just as they would to a printed document. Nevertheless, the Court of Appeals held, “plainly referring” to a document requires “more than merely mentioning it.” “The language in the signed document must show the parties intended for the [unsigned] document to become part of the agreement.” Here, the Court found the language in question was unambiguous and did not show the parties intended that provisions on the referenced web page were to become part of their deal. Instead, the language indicated the web page “contained informative material only, not binding terms and conditions intended to be part of the parties’ contract.” And so the appeals court reversed the trial court’s determination that the forum-selection clause had been incorporated into the parties’ written contract.

In addition to its finding of “consent,” the trial court also had held Montgomery bound to the forum-selection provision under various theories of estoppel, quasi-estoppel, and ratification. But the Court of Appeals ruled that the trial court’s erroneous threshold determination, that the forum-selection clause was incorporated into the contract, was essential to each of these findings, as well, and therefore that they, too, must be reversed.

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