Judge Alvin K. Hellerstein ruled that because there was simply
an opportunity to read the terms and conditions and the users
attention was not clearly drawn towards reading them, they did not
form the basis for a binding contract. Moreover, the user was not
required to give express consent to the agreement and so could not
be shown to have agreed to its terms.
This particular case was distinguished from click-wrap license
agreements, which appear on many web sites. They are usually
enforceable if they are clearly displayed for the user to read and
require to indicate consent by clicking on “yes” before proceeding
to download any products. The Netscape license agreement was
referred to as a browse-wrap agreement because it was conceivable
that a user may download the software without even being aware of
the license’s existence.
The validity of the license agreement was questioned following
challenges to the use of a tracking device, which was incorporated
into the SmartDownload software to monitor users on-line
activities. Such devices may pose a severe threat to an
individual’s on-line privacy, particularly where the user is not
informed of its use.
Netscape removed the tracking device from its SmartDownload
software, but it argued that the license agreement obliged any
users who had complained about it to participate in an arbitration
process rather than filing a suit in the courts. The court finding
dismisses this argument and now permits a class action to be
brought against Netscape.
