Was DIRECTV’s mailed customer agreement enforceable without a new signature in South Carolina?

Plain-English summary

A South Carolina legislator asked whether a constituent’s mailed DIRECTV “Customer Agreement” could change service terms without a new signed contract. In March 2002, the AG did not decide whether the agreement or its change-of-terms clause was enforceable. He quoted the clause’s notice language and described general rules for contracts and adhesion contracts, but said enforceability of this particular agreement or provision was a factual question the office could not resolve.

The AG explained that a standard-form, take-it-or-leave-it agreement could be an adhesion contract without automatically being unconscionable. He cited a federal court that had called a DIRECTV customer agreement an adhesion contract while recognizing the practical use of standard terms in television service. The letter left the constituent’s specific dispute unanswered.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Customers and service providers

The opinion described the mailed agreement’s clause allowing changes with notice. It did not hold that the clause was valid or invalid for the constituent.

Contract disputes

The AG said South Carolina law did not make an adhesion contract unenforceable by label alone. Whether particular terms were unenforceable required factual analysis beyond this opinion.

Common questions

Did the AG approve DIRECTV’s mailed change of terms?
A: No. He declined to decide enforceability of the particular agreement or provision.

Was a standard-form contract automatically unconscionable? A: The AG said no; an adhesion contract was not unconscionable solely because it was offered on nonnegotiable terms.

Did the opinion decide whether a new signature was required? A: No. The specific contract question remained a factual issue outside the office’s answer.

Background and statutory framework

The letter quoted the agreement’s “Changes in Contract Terms” clause and discussed contract freedom, adhesion contracts and unconscionability under cases cited by the AG. It expressly stopped before applying those rules to the constituent’s facts.

Citations and references

• Munoz v. Green Tree Financial Corp.: South Carolina decision cited for the meaning of an adhesion contract.

Official title

Regarding the legality of a “Customer Agreement” between DIRECTV, Inc. and a constituent. Specifically, when the “constituent received…the…agreement in the mail several months ago…[and the]…document appears to change the terms of the agreement without requiring the constituent to sign a new contract .”

Requester

The Honorable Ronald P. Townsend, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/march-21-2002/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/04/02march21townsend.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLIE CONDON

March 21, 2002

ATTORNEY GENERAL

!
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The Honorable Ronald P. Townsend
Member, House of Representatives
P.O. Box 11867
Columbia, South Carolina 29211

Re:

Your Letter of J~nuary 9, 2002

Dear Representative Townsend:

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In your above-referenced letter, you request an informal opinion from this Office regarding the legality of a "Customer Agreement" between DIRECTV, Inc. and one of your constituents. You attached a copy of the agreement in question and indicate that the "constituent received ... the ... agreement in the mail several months ago ... [and the] ... document appears to change the terms of the agreement without requiring the constituent to sign a new contract. One of the terms of the agreement you provided is titled "Changes in Contract Terms" and provides in pertinent part as follows: Due to the evolving nature of the multi-channel video programming distribution industry, its competition and the requirements and costs of programming suppliers, we must reserve the right to change our programming and the terms on which we offer Service from time to time, as we believe appropriate, including our fees and charges. If we make any such changes, we will send you a notice describing them and their effective date. Generally, American courts take the view that "competent adults may make contracts on their own terms, provided they are neither illegal nor contrary to public policy and, in the absence of fraud, mistake, or duress, that a party who has fairly and voluntarily entered into such a contract is bound thereby, notwithstanding that it was unwise or disadvantageous to that party." See Metropolitan Life Ins. Co. v. Strnad, 876 P.2d 1362 (1994). Courts will, however, impose limitations on the enforcement of certain contracts. One such instance involves the enforcement of an adhesion contract "when a contract or provision [thereof] does not fall within the reasonable expectations of the weaker ... party." Southern Atlantic Financial Services, Inc. v. Middleton, (2002 WL 264888 (S.C.App.)).

REMBERT

c. DENNIS BUILDING

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POST OFFICE Box 11549

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COLUMBIA, S.C. 29211-1549

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TELEPHONE: 803-734-3970

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FACSIMILE: 803-253-6283

The Honorable Ronald P. Townsend
Page 2
March 21, 2002

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An adhesion contract is a standard form contract offered on a take-it or leave-it basis with terms that are not negotiable. Munoz v. Green Tree Financial Corp., 343 S.C. 531, 542 S.E.2d 360 (2001). Under state law, an adhesion contract is not per se unconscionable. Id. To be unconscionable, there must be the absence of meaningful choice on the part of one party due to one-sided contract provisions together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them. Lackey v. Green Tree Fin .
.Qm:h, 330 S.C. 388, 498 S.E.2d 898 (Ct.App.1998).

A Federal District Court recently considered a "Customer Agreement" from DIRECTV and held it to be an adhesion contract. See Bischoffv. DIRECTV, Inc., 180 F. Supp.2d I 097 (C.D. Calif. 2002). The Bischoff Court noted, however, that "[p]ractical business realities make it unrealistic to expect DIRECTV, or any television programming service provider for that matter, to negotiate all of the terms of their customer contracts ... with each customer before initiating service." Accordingly, even though the "Customer Agreement" may be considered an adhesion contract, it is a question of fact as to whether the agreement or any particular provision thereof is unenforceable. This Office cannot comment on questions of fact. See OP. ATTY. GEN. (Dated August, 5, 1992). This letter is an informal opinion only. It has been written by a designated Assistant Attorney General and represents the position of the undersigned attorney as to the specific question asked. It has not, however, been personally scrutinized by the Attorney General and not officially published in the manner of a formal opinion.

David K. Avant
Assistant Attorney General
DK.A/an