In the case of Southwest Airlines Co. v. BoardFirst, LLC, a Texas court held that a user of a website was bound by the terms and conditions of that website where the user has actual knowledge of such terms and conditions.

The Plaintiffs, Southwest airlines maintained a first come, first served, open seating policy, where passengers are arranged in groups. The Defendant, Boardfirst.com was an internet company that provided a service to Southwest customers whereby for a fee, a passenger could check in early and BoardFirst would attempt to get the passenger into the first boarding group.

Southwest filed suit against Boardfirst alleging that BoardFirsts service was a violation of the Southwest Web site's terms of service because the terms of service stated that the user agreed that he/she shall not use the Southwest site for any purpose other than personal, non-commercial reasons.

This case turned on two major points.

First, the court examined whether the terms of service were a valid contract. The court held that so long as the user has "actual or constructive knowledge" of the terms and conditions of the user agreement, the terms of service are a valid contract.

The court held that BoardFirst had actual knowledge of the terms and conditions because they were clearly displayed via a link on the Southwest homepage, hence creating a binding contract between Southwest and BoardFirst.

Secondly, the court determined that BoardFirst had violated the terms and conditions by using the site for commercial purposes even though they were acting as agents for Southwest’s customers. Therefore, the court ordered a permanent injunction which would stop BoardFirst from ever using Southwest’s website.

The court further stated that although it knew that the court’s order would cause the dissolution of BoardFirst as a company, it was the only way to ensure that BoardFirst would stop its unauthorized use of Southwest’s website.