As the Maryland courts recognize, we all “agree” to “click‐wrap” agreements routinely,1 but can we be compelled to arbitrate when we do? While the Maryland courts have yet to rule directly on this issue,2 such agreements would likely bind a business – but not necessarily a consumer – to arbitrate. Here’s why:

As the Maryland Court of Appeals “noted more than 60 years ago, the question of arbitrability is one of intention. No one is under a duty to resort to arbitration tribunals, however helpful their process, except to the extent that he has signified his willingness.”3 In a case between businesses involving the validity of a click‐wrap agreement’s forum selection clause, the Hon. Ronald B. Rubin of the Circuit Court for Montgomery County (a) noted that under Maryland law, a party’s conduct may manifest intent to be bound to a written contract and (b) found that the defendants accepted the terms of their click‐wrap agreement when they clicked on the “I Accept” button.4 Is there really more to the issue?

In the seminal case on this subject, Specht v. Netscape Commc’n Corp., 306 F.3d 17 (2d Cir. 2002), then Circuit Judge Sotomayor affirmed the Southern District of New York’s decision not to enforce an arbitration clause in a click‐wrap agreement against a putative class of individuals. In that case, users downloaded free software which came with terms of use that included an arbitration clause, but the terms were located on a screen below the download button. Thus, the court concluded that “plaintiffs’ bare act of downloading the software did not unambiguously manifest assent to the arbitration provision contained in the license terms.” Specht, 306 F.3d at 20. Specht continues to be applied by courts considering arbitration clauses in click‐wrap agreements. As reflected in these three recent decisions, courts focus both on the notice of terms provided to the plaintiffs, as well as the actions taken by plaintiffs to acknowledge and agree to those terms.

On December 11, 2012, in Hancock v. AT&T, the Tenth Circuit Court of Appeals noted that, applying state law contract principles, “[c]ourts evaluate whether a click‐wrap agreement’s terms were clearly presented to the consumer, the consumer had an opportunity to read the agreement, and the consumer manifested an unambiguous acceptance of the terms.” 701 F.3d 1248, 1256 (10th Cir. 2012) (citations omitted). In that case, consumer plaintiffs were presented with a printed copy of terms (including the arbitration clause) related to the use of defendant’s Internet service, and specifically had to click an “I Acknowledge” button on a technician’s laptop prior to installation, and had to click another “I Agree” button when registering for the service. The court affirmed the district court’s enforcement of the arbitration provision.

On February 27, 2013, in Vernon v. Qwest Comm’n Intl., Inc., __ F.Supp.2d__, 2013 WL 752155 (D. Colo. Feb. 27, 2013), the District of Colorado enforced an arbitration provision in a click‐wrap agreement in a putative consumer class action challenging a $200 early termination fee relating to Internet service. In that case, plaintiffs were repeatedly provided a link to terms of use; warned that the terms included an arbitration provision; provided an opportunity to cancel service within 30 days; and, on installation, clicked a button labeled “I accept the terms of the license agreement” that specifically noted that the plaintiffs were acknowledging that they understood and agreed to terms, even if plaintiffs did not read such terms.5

On March 19, 2013, in Rasschaert v. Frontier Comm’n Corp., 2013 WL 1149549 (D. Minn. Mar. 19, 2013), the district court again compelled arbitration in a putative class action involving Internet service. In a “close” call, the district court found that an arbitration agreement existed even though it was not present in the defendant’s original terms of use and it was added unilaterally. There, the plaintiffs were notified in their monthly bills that the arbitration provision would be added to the terms of use (to be effective 45 days from the date of the bill) and the bill directed plaintiffs to the terms of use.6

Particularly when dealing with individual users, courts focus on whether an objectively reasonable plaintiff would be aware of the terms of the contract he or she is asked to accept by conduct. Consistent with that, Maryland has adopted the Uniform Computer Information Transactions Act, Md. Code Ann., Comm. Law Art., § 22‐101, et seq. (UCITA), which provides that a user takes an action – electronically signing or other conduct – that manifests assent only after an opportunity to review terms that would be called to the attention of a reasonable person. Id. § 22‐112. Applying the UCITA, in CVent, Inc. v. Eventbrite, Inc., 739 F.Supp.2d 927, 936‐37 (E.D.Va. 2010), the Eastern District of Virginia dismissed a breach of contract claim between two businesses where the alleged contract was predicted on terms of use found only through a link at the bottom of the first page of the plaintiff’s website, and no allegations in the complaint reflected actual or constructive knowledge of the terms, let alone any manifestation of assent to them. The Eastern District of Virginia noted that screen shots of the website contracted the UCITA’s requirement that terms of use must be available in a matter than would be called to the attention of a reasonable person and further noted that mere use of the website was not assent to the terms of use. Were the court in Rasschaert applying the UCITA, the “close” call may well have tipped in favor of the plaintiffs and against finding the existence of an agreement, as it did in the CVent case.

Thus, when seeking to enforce an arbitration clause in a “click‐wrap” agreement in Maryland – particularly against an individual – the arbitration provision should be presented clearly, the user should be given an opportunity to review it and the user should be asked to “click” his or her assent unambiguously.