|Specht v. Netscape Communications Corp.|
United States District Court for the Southern District of New York
| Argued 2001 |
Decided July 3, 2001
|The court ruled that the license agreement for the Smart Download software was not binding on the plaintiffs and thus denied to compel arbitration for plaintiff's breach of the license agreement.|
Users who want to download Smart Download can go to Netscape's website to download the application. On the website, there is a download button, which, when clicked, downloads the "Smart Download" software. The reference to a License Agreement can be found only if a user scrolls down to the bottom of the page where the following text is displayed:
Please review and agree to the terms of the Netscape Smart Download software license agreement before downloading and using the software.
If the user then clicks on the link in the text, they will be taken to a web page titled "License & Support Agreements", which contains the following text:
The use of each Netscape software product is governed by a license agreement. You must read and agree to the license agreement terms BEFORE acquiring a product. Please click on the appropriate link below to review the current license agreement for the product of interest to you before acquisition. For products available for download, you must read and agree to the license agreement terms BEFORE you install the software. If you do not agree to the license terms, do not download, install or use the software.
This page also contains a link to the full text of the Smart Download software license. This license agreement indicates that by using or installing the Smart Download software, the user agrees to be bound by the terms of the license agreement:
BY CLICKING THE ACCEPTANCE BUTTON OR INSTALLING OR USING NETSCAPE COMMUNICATOR, NETSCAPE NAVIGATOR, OR NETSCAPE SMART DOWNLOAD SOFTWARE (THE "PRODUCT"), THE INDIVIDUAL OR ENTITY LICENSING THE PRODUCT ("LICENSEE")IS CONSENTING TO BE BOUND BY AND IS BECOMING A PARTY TO THIS AGREEMENT. IF LICENSEE DOES NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, THE BUTTON INDICATING NON-ACCEPTANCE MUST BE SELECTED, AND LICENSEE MUST NOT INSTALL OR USE THE SOFTWARE.
However, a user can download and use the software without taking any action explicitly indicating consent to the License Agreement.
The court ruled that the software license agreement was not binding because a binding contract means that both parties know of the terms and agree to them. The Smart Download license agreement was not binding because 1) the user did not have to click on an icon or link to indicate assent before downloading and using the software 2) the text near where the user can download the application merely indicated an invitation to view the license agreement not a strong condition that the user must agree to the agreement before using the software 3) the full text of the license agreement was only visible if the user clicked on a text next to the download button.