ISP's liablity- contract and fraud

When reviewing about ISPs’ liability, the main issue that we should not neglect is the promise of the ISPs and how they are able to keep the promise to provide good and better service for their subscribers. Subscribers will pay for the service provided so what is the consideration given on the part of the ISPs? An Internet Service Provider as discussed in past posts is a company which provides Internet access to its subscribers in exchange for a monthly fee. This has involved a deal of contract between the ISP and its particular subscriber. In contract, parties of it have to abide the obligation agreed upon signing the contact or the legal agreement. Thus, in this situation, we would like to stress that whenever an ISP signs an agreement to provide the Internet access service to its subscriber and receive the required fee, it is to be said that they have to ascertain that the subscriber is able to use their server to access the Internet in all reasonable means.

However, what if one of the subscribers cannot access to the Internet just like what have been promised on the time they made the deal? Is this considered as a breach of contract? What are the rights of the subscribers as they had already paid the fee? This week post will discuss about the contract and fraud liability on the ISPs and focused on a trademark case on this issue.

In the context of ISPs liability, if the above situation occurs, the ISPs are said to be liable to the breach of contract as well as fraud. An agreement made by the ISPs and their subscribers upon receiving the fees is to provide and facilitate their subscribers to have an access to the Internet. Thus, if any of their subscribers cannot be able to access to the Internet and the primary cause of that disability is due to the failure of the ISPs, they are persuaded to claim their right by taking a legal action towards the ISPs as they have breach the contract and committing fraud.

There is an American case (there are no Malaysian cases reported yet) reported regarding this issue on contract and fraud liability by ISPs. Taken from the BitLaw, the case is all about the famous America On Line (AOL) which is one of the biggest ISPs in USA. When AOL announced that it was shifting to a flat-rate billing policy, AOL's proprietary and Internet access services were overwhelmed. Customers who tried to dial in were often greeted by busy signals, and access to the Internet was very slow. Although AOL's performance improved, that did not stop frustrated customers from bringing lawsuits against the company. These suits alleged that AOL knew that their service would be overloaded, but nonetheless went ahead with the flat-rate plan. The suits alleged that AOL was in breach of its contracts with its customers (by not providing the agreed upon service) and had committed fraud by knowingly misleading current and prospective customers. At this point, AOL has not been found liable for its actions. However, the message for ISPs is clear. Deliver on all of the promises you make to your customers, and only promise what you can deliver.

Through the stated case on AOL, it is clearly shown that a contract deal is not to be breached and all the obligations within the contract must be fulfilled based on what has been agreed between the parties. For the purpose of liability on ISPs, we have to be aware that a promise to serve an Internet access is still a contract which needs to be done and any technical difficulties will not be an excuse when dealing with cyber problems.

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