Specht v. Netscape Communications Corp.
Citation and Court
Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (Sotomayor, J.)
Facts
Users downloaded free software from Netscape’s website. The license agreement—which contained an arbitration clause—was posted on a separate webpage that users could access by scrolling down, but there was no prompt requiring users to view or affirmatively accept the license before downloading. Netscape argued users were bound by the license terms; Specht and other plaintiffs argued they had no notice of the arbitration clause.
Issue
Whether users who downloaded software from a website without being required to click to accept a license agreement were bound by the terms of that agreement, including its arbitration clause.
Holding
Judge Sotomayor held that the browsewrap agreement was unenforceable because users had no adequate notice of the license terms and were not required to take any affirmative step indicating assent to those terms.
Rule / Doctrine
A browsewrap agreement—where terms are made available by a link or scroll but users need not affirmatively indicate assent—is unenforceable unless the user had actual or constructive notice of the terms. Mere access to terms on a linked or submerged webpage does not constitute notice sufficient to bind a user who was not prompted to review or accept them.
Significance
The leading Second Circuit case distinguishing enforceable clickwrap agreements (see Caspi v. Microsoft Network) from unenforceable browsewrap agreements. Establishes that mutual assent in the online context requires that the user have reasonable notice of terms and an opportunity to manifest acceptance. Judge Sotomayor’s opinion is widely cited in internet contract law.