No, the users did not agree to the hidden rules. Just clicking 'Download' isn't the same as saying 'I agree,' especially when the company didn't make it clear that there was anything to agree to. The court said a normal person wouldn't think to scroll down to look for hidden legal terms before downloading a free program. For a contract to be real, both sides have to clearly agree to it. Because Netscape didn't give people a fair warning about the rules, no agreement was ever made.

No. The people did not agree to the software's contract terms because the terms were not clearly shown to them. For an online contract to be valid, the user must be given clear notice that contract terms exist and must clearly show they agree to the terms. Here, the people were not given clear notice of the terms because the info about the terms was hidden and could only be seen by scrolling to another page. Also, just clicking the download button did not clearly show agreement to the terms because it wasn't made clear that clicking meant agreeing. So, the people are not bound by the arbitration requirement in the software's contract terms.

"Reasonably conspicuous notice of the existence of the contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility."

A] consumer's clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking on the download button would signify assent to those terms

In determining whether to compel arbitration, a court must determine (1) whether such agreement exists between the parties, as determined by state contract law; and, if so,(2) whether the dispute falls within the scope of that agreement.

In Specht, the plaintiffs had downloaded free software from the defendant's website; because they did not scroll down the page, they did not see the notice advising site-users to review and agree to the software license agreement's terms prior to downloading.

"Mutual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract."

Id. at* 5-6. "A clickwrap agreement `presents the user with a message on his or her computer screen, requiring that the user manifest his or her assent to the terms of the license agreement by clicking on an icon.'"Id. at* 5

—where consumers are urged to download free software at the immediate click of a button, a reference to the existence of license terms on a submerged screen is not sufficient to place consumers on inquiry or constructive notice of those terms

It is well settled that a court may not compel arbitration until it has resolved `the question of the very existence'of the contract embodying the arbitration clause

With respect to inquiry notice, courts have refused to enforce browsewrap agreements "[w] here the link to a website's terms of use is buried at the bottom of the page or tucked away in obscure corners of the website where users are unlikely to see it...."

—traditional contract principles applicable to "the world of paper transactions" regarding the enforceability of contract terms against a party on notice of the existence of those terms "apply equally to the emergent world" of online contracting

No, a user's act of downloading software does not form a binding contract to its license terms when notice of those terms is not reasonably conspicuous. A consumer's clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking the button would signify assent to those terms. The court reasoned that a reasonably prudent Internet user would not have known or learned of the license terms hidden on a submerged portion of the screen below the download button. Unlike 'clickwrap' agreements where users must affirmatively click 'I agree,' this 'browsewrap' scenario did not require an unambiguous manifestation of assent. Therefore, because Netscape did not provide reasonable notice and the plaintiffs did not unambiguously assent, no contract was formed. The court also held that the arbitration clause in the separate 'Communicator' software license did not apply to this dispute, as the claims regarding SmartDownload were collateral to that agreement. Finally, the court rejected the claim that Specht was bound as a third-party beneficiary, finding any benefit he received was too indirect and speculative.

No. Plaintiffs did not assent to SmartDownload's license terms because the terms were not reasonably conspicuous. Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential for electronic contracts to be valid. Here, plaintiffs were not provided with reasonably conspicuous notice of SmartDownload's license terms because the sole reference to the terms was located in text that would have become visible only if plaintiffs had scrolled down to the next screen. Furthermore, plaintiffs' act of clicking on the download button did not unambiguously manifest assent to the license terms because the offer did not make clear that clicking would signify assent to those terms. Therefore, plaintiffs are not bound by the arbitration clause contained in SmartDownload's license terms.

No. We hold that plaintiffs did not assent to SmartDownload's license terms because the terms were not reasonably conspicuous. Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential for electronic contracts to be valid. Here, plaintiffs were not provided with reasonably conspicuous notice of SmartDownload's license terms because the sole reference to the terms was located in text that would have become visible only if plaintiffs had scrolled down to the next screen. Furthermore, plaintiffs' act of clicking on the download button did not unambiguously manifest assent to the license terms because the offer did not make clear that clicking would signify assent to those terms. Therefore, plaintiffs are not bound by the arbitration clause contained in SmartDownload's license terms.

Specht v. Netscape Communications Corp.

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