Lim v. The .TV Corporation Int’l, 99 Cal.App.4th 684, 121 Cal.Rptr.2d 333 (2002) (full-text).
Plaintiff, Je Ho Lim, a resident of South Korea, doing business as Future Computing Solutions, filed suit against Defendant, DotTV Corporation, a Delaware corporation with its principal place of business in California. DotTV offers domain names with the .tv extension, which the company acquired through an agreement with the island nation of Tuvalu. DotTV also offers particularly desirable domain names at public auction.
The name “Golf.tv” was deemed by defendant to fall into that category, and defendant posted it on its website for auction to the highest bidder. Plaintiff alleged that DotTV began offering the “golf.tv” name in April 2000, and plaintiff bid $1,010 on May 25, 2000. Plaintiff entered his credit card information and ostensibly purchased the domain name. Defendant then sent plaintiff an email with the subject “E-Mail Invoice for Domain Registration.” The email congratulated plaintiff on his purchase of the name and informed plaintiff that he “would have 'the guaranteed right to renew the registration indefinitely.'"
However, soon thereafter, defendant tried to disavow the agreement. It notified plaintiff that “'we have decided to release you from your bid'” and that plaintiff should “'disregard'” the acceptance notification. Later, defendant publicly offered the name “Golf.tv” with an opening bid of $1 million. Defendant claimed that the auction in which plaintiff had participated was void due to a “technical error” and that the e-mail concerned a different domain name, “-- --golf” instead of “golf;” “-- --golf” is invalid, a fact recognized by DotTV itself. Plaintiff sued defendant for intentional misrepresentation and fraud, breach of the implied covenant of good faith and fair dealing, and for declaratory relief.
Trial Court Proceedings
At trial, the defendant moved to dismiss based on an inconsistency between the language in the amended pleading filed by plaintiff. The court sustained defendant's demurrer noting that the first amended complaint alleged that plaintiff’s bid for the domain name “golf.tv” was an offer and was accepted by defendant's e-mail. The court ruled that the e-mail referred to the name as “-- --golf,” which is different from “golf,” and since the offer and acceptance referred to different names, no contract was formed.
In a the second amended complaint plaintiff tried to circumvent this problem by alleging that the bid was an acceptance of defendant's offer and that the e-mail merely memorialized the agreement. The trial court found that this is impermissible because it is inconsistent with the first pleading. Thus, the court entered demurred without leave to amend. Plaintiff appealed.
Appellate Court Proceedings
The Court of Appeals reversed and remanded noting that defendant’s offering the name at auction was an offer, and plaintiff's bid was an acceptance, conditioned on there being no higher bids. Since plaintiff accepted the offer precisely as it was made, and no one submitted a higher bid, a contract resulted between the parties. Plaintiff's acceptance of DotTV's offer was pursuant to established law as well as Internet custom and practice, and in accordance with policies and procedures established by defendant.
As to the adequacy of the pleading, the court reasoned that plaintiff ‘s factual claim was enough to plead existence and breach of a contract. Likewise, the “invoice” e-mail should be construed as an acknowledgment of defendant’s acceptance and confirmation of the contract. Therefore, the demurrer was improper under the circumstances.