Question
In terms of contract, a substantial difference brought by the online environment is the form how a contract is presented. The term clickwrap agreement is
In terms of contract, a substantial difference brought by the online environment is the form how a contract is presented. The term "clickwrap" agreement is thetype of agreement we usually see online, where user are asked to click on the "I agree" or alike buttons to express their assent to the agreement. However, due to the vast information usually contained in a webpage, the term of agreement may or may not be properly expressed and accepted, which could cause various disputes. Read the following cases and answer questions at the end.
Case 1: Feidmanv. Google, Inc.
Feldman, a lawyer by profession, bought advertising from Google Inc's in order to attract potential clients for his practice. Each time an Internet user searched and clicked on Google for keywords or "Adwords" purchased by him, he would be charged by Google for each click. Feldman however held the view that he was a victim of "click fraud" which results when competitors or pranksters who are not interested in the services of the advertiser, repeatedly click on the ad. This practice thereby drove up the advertising costs of Feldman and discouraged him from advertising.This made Feldman to file a suit against Google in the federal district court of Pennsylvania on the ground that 20 to 30 percent of the clicks for which he had been charged by Google were related to click fraud and that Google had the capability to track and prevent such fraud. However, apart from seeking to quash the charge against it, Google also moved to have the case transferred to court in California on the premise that a forum selection clause in the Adwords online agreement-which Feldman must have clicked on before he could place his ads through Google required disputes to be resolved in Santa Clara County, California. Furthermore, Feldman asserted that he had clicked on the online agreement which was preceded by the statement "Carefully read the following terms and conditions. If you agree with these terms, indicate your assent below". Apart from this, the first few paragraphs of this contract were visible on the computer window that an advertiser had the ability to read the entire contract by scrolling through it. So, consent to the terms listed in the Agreement constitutes a binding agreement with Google and this is stated in the preamble which is visible at first impression. Also available for advertisers who want a hard copy of the contract is a link to the printer-friendly version of the contract. The plaintiff however maintained that he had no notice to the agreement terms and that there was no mutual assent to the agreement. Google filed a motion to dismiss Feldman's complaint, or in the alternative, to transfer the case to California. Feldman filed a cross-motion for summary judgment.Defendant's motion to transfer is granted and Plaintiff's motion for summary judgment is denied.
Case 2: Spechetv. Netscape Communications Corp.
Netscape Communications Corp. (Netscape) provides two separate software programs known as "Communicator" and "SmartDownload." When Internet users download these programs, the programs track the users' Internet usage and display advertisements relevant to such usage. Before downloading Communicator, all users are required to view and accept a license spelling out these terms of use. The license automatically displays on the computer screens of everyone who attempts to download Communicator. However, a similar license does not appear on the screens of those who attempt to download SmartDownload. Rather, users just see a button which says "download" and invites them to click to download the program. A link to the license agreement for SmartDownload can be viewed by users who scrolled down their screens below the "download" button. However, this link is not automatically visible to users who do not scroll down. Both license agreements for Communicator and SmartDownload contain arbitration clauses. Specht (plaintiff) and five other plaintiffs all downloaded both Communicator and SmartDownload. They agreed to the license agreement for Communicator but were unaware of and thus did not agree to the license agreement for SmartDownload. If they had clicked on the license link for SmartDownload, Specht and the other plaintiffs would have been presented with a screen telling them that by downloading the product, they were agreeing to be bound by the terms of the license agreement. Specht and the other plaintiffs brought suit against Netscape in federal district court on the ground that the Communicator and SmartDownload software is a violation of privacy and electronic "eavesdropping" statutes. Netscape sought to enforce the terms of its license agreements for both Communicator and SmartDownload with all plaintiffs. Specht argued that they should not be bound by the arbitration clause for the SmartDownload contract because the license for that product is not visible to a reasonable internet user. The district court agreed and held all plaintiffs were not bound by the license agreements for either Communicator or SmartDownload. Netscape appealed.
Case 3: Bragg v. Lindon Lab
In 2006, Pennsylvania lawyer Marc Bragg brought a lawsuit against Second Life (an onlinegame which creates a virtual world) developer Linden Lab when his account was unilaterally disabled by Second Life administrators. Linden Lab claimed that Marc Bragg had violated their Terms of Service by URL-hacking the Second Life virtual land auction website in order to gain access to otherwise unavailable auctions. As a result, Bragg was able to purchase virtual land within Second Life valued at $1,000 for approximately $300. Bragg's account was suspended while Linden Lab conducted an investigation, and later closed completely. Bragg argued that by closing his account, Linden Lab also dissolved his virtual assets, which he valued at between US$4,000 and US$6,000.
On May 1, 2006, Bragg initially filed his suit in the West Chester District Court in Pennsylvania. After retaining private counsel, Jason A. Archinaco, Bragg refiled on October 4, 2006. His new complaint named Philip Rosedale, the creator of Second Life, as an independent defendant.
On November 7, 2006, Linden Lab responded with three filings: they sought to remove the case to federal court, they sought to dismiss claims against Philip Rosedale due to a lack of personal jurisdiction, and they sought to compel Bragg to participate in the mandatory arbitration outlined in the Second Life Terms of Service.Bragg opposed the removal and sought to remand the case back to state court. Linden Lab opposed the motion and was successful.
On May 30, 2007, Judge Robreno of the United States District Court for the Eastern District of Pennsylvania denied Rosedale's motion to dismiss for lack of personal jurisdiction, finding that Rosedale met the minimum contacts threshold by his nationwide personal marketing efforts to publicize Second Life. The Court also denied Linden Lab's motion to compel arbitration, finding that the Terms of Service represented anadhesion contractthat was unjustly biased towards Linden Lab.
The court held that : "When the weaker party has presented the clause and told to 'take it or leave it' without the opportunity for meaningful negotiation, oppression, and therefore procedural unconscionability, are present. ... An arbitration agreement that is an essential part of a 'take it or leave it' employment condition, without more, is procedurally unconscionable."
Question 1: a key component for a contract to be valid is mutual assent. Above cases present some similarities while all have their own unique details. In your opinion, what constitutes a "mutual" assent between you and the website you are visiting, i.e., do you agree with the conclusionof above cases, why or why not? Explain your reasoning from the stand point as a consumer, and as a service provider.
Question 2: Nevertheless, in most times, individual consumers are still at the weak side. E.g., most term of agreements are voluminous and enigmatic, and most services, while alternatives can be found, are still somewhat one-of-a-kind and thus the agreements are still "take-it-or-leave-it". In such atmosphereof the online world, what would you do to protect your own rights?
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