Enforceable Browse Wrap Contracts
New Jersey Law Journal
Volume 197, No. 11, Index 853
Copyright 2009 by Incisive Media US Properties, LLC
September 14, 2009
ENFORCEABLE BROWSE-WRAP CONTRACTS -- SUFFICIENT NOTICE IS NOT A BRIGHT-LINE TEST
By Jonathan Bick Bick is of counsel to Brach Eichler of Roseland and is an adjunct professor of Internet law at Pace Law School and Rutgers Law School. He is also the author of 101 Things You Need To Know About Internet Law [Random House 2000] and Karen Berger is an Internet lawyer in West Orange..
Sufficient notice is not a bright-line test. Rather, it has been used on a case-by-case basis. In Specht v. Netscape Communications Co rp., 306 F.3d 17 (2d Cir. 2002) , the dispute was whether users of Netscape's software, who downloaded it from Netscape's Web site, were bound by an agreement to arbitrate disputes with Netscape, where Netscape had posted the terms of its offer of the software (including the obligation to arbitrate disputes) on the Web site from which they downloaded the software. The court ruled against Netscape because the users would not have seen the terms Netscape exacted without scrolling down their computer screens, and there was no reason for them to do so.
Had plaintiffs scrolled down instead of acting on defendants' invitation to click on the 'Download' button, they would have encountered the following invitation: 'Please review and agree to the terms of the Netscape Smart-Download software license agreement before downloading and using the software. ' The court found the evidence did not demonstrate that one who had downloaded Netscape's software had necessarily seen the terms of its offer and ruled the agreement unenforceable.
The Second Circuit reached a different result in Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2nd Cir. 2004) , where it was undisputed that the users of a Web site had actual knowledge of the terms and conditions posted on the site. Register sells Internet domain names and Verio designs and develops Web sites. Register was contractually required to make its customers' contact information available free of charge to the public for any lawful purpose. An entity making a query through Register's Internet site would receive a reply furnishing the requested information, captioned by a legend devised by Register, which stated, 'By submitting a WHOIS query, you agree that you will use this data only for lawful purposes and that under no circumstances will you use this data to... support the transmission of mass unsolicited, commercial advertising or solicitation via email.'
Despite this, Verio devised an automated robot to retrieve the information and use it for marketing purposes on a regular basis. The District Court granted Register's preliminary injunction, which was upheld by the Second Circuit.
On appeal, Verio had conceded that it was aware of the restrictions Register placed on the use of the contact information and that by using such information for its own marketing opportunities it was violating those restrictions. Nevertheless, Verio argued that it never became contractually bound to the conditions imposed by the legend because the legend did not appear on the screen until after Verio had made a query and received the desired information from Register.
The Viero Court relied on basic contract law stating:
While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract. It is standard contract doctrine that when a benefit is offered subject to stated conditions, and the offeree makes a decision to take the benefit with knowledge of the terms of the offer, the taking constitutes an acceptance of the terms, which accordingly become binding on the offeree. See, e.g., Restatement (Second) of Contracts § 69(1)(a) (1981) ('[S]ilence and inaction operate as an acceptance ... [w]here an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.'); 2 Richard A. Lord, Williston on Contracts Section 6:9 (4th ed. 1991) .