Defendant Netscape, a provider of computer software programs that enable and facilitate the use of the Internet, offers its "SmartDownload" software free of charge on its web site to all those who visit the site and indicate, by clicking their mouse in a designated box, that they wish to obtain it. SmartDownload is a program that makes it easier for its users to download files from the Internet without losing their interim progress when they pause to engage in some other task, or if their Internet connection is severed. The Plaintiff, Christopher Specht, selected and clicked in the box indicating a decision to obtain the software, and proceeded to download the software on to the hard drive of his computer. Visitors wishing to obtain SmartDownload from Netscape's web site arrive at a page at the site pertaining to the download of the software. On this page, there appears a tinted button labeled "Download." By clicking on the button, a visitor initiates the download. On the download page there is a reference to a License Agreement that appears in text that is visible if a visitor scrolls down through the page to the next screen. If a visitor does so, he or she sees the following invitation to review the License Agreement that governs use of the SmartDownload software: Please review and agree to the terms of the Netscape SmartDownload software license agreement before downloading and using the software. Visitors are not required affirmatively to indicate their assent to the License Agreement, or even to view the license agreement, before proceeding with a download of the software. But if a visitor chooses to click on the underlined text in the invitation, a hypertext link takes the visitor to a web page entitled "License & Support Agreements." The License Agreement generally grants the user a license to use and reproduce SmartDownload. It has only one restriction; the software must be used for consumer purposes only. No business uses are permitted. There are also specific provisions concerning acceptance of the terms of the License Agreement and dispute resolution which read as follows: The use of this software product is governed by a license agreement. You must read and agree to the license agreement terms BEFORE acquiring this product. If you do not agree to the license terms, do not download, install or use the software. BY CLICKING THE ACCEPTANCE BUTTON OR INSTALLING OR USING NETSCAPE SMARTDOWNLOAD SOFTWARE (THE "PRODUCT"), THE INDIVIDUAL 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.

Unless otherwise agreed in writing, all disputes relating to this Agreement (excepting any dispute relating to intellectual property rights) shall be subject to final and binding arbitration in Santa Clara County, California, under the supervision of the American Arbitration Association, with the losing party paying all costs of arbitration. Christopher Specht selected and clicked in the box indicating a decision to obtain the software, and proceeded to download the software on to the hard drive of his computer. He did not opt to read the License Agreement and was not required to do so in order to complete the download process. He claims that he never saw the terms of the License Agreement restricting use of the software to consumer use and requiring arbitration in the event of a dispute concerning the software's use or functionality. As it turns out, Specht was using SmartDownload on a computer he used for his consulting practice, not for consumer use. The software he downloaded had a "bug" which successfully deleted every customer database he had stored on his hard drive. As a result, Specht is claiming damages in excess of $30,000. Specht brought a lawsuit against Netscape in King County Superior Court in Seattle, Washington (his home). Netscape filed a motion to dismiss based on the arbitration clause contained in the License Agreement. The trial court ruled in favor of Netscape finding the arbitration clause to be a binding contract term between Specht and Netscape. It also issued an order to Specht compelling him to arbitrate the dispute in California per the License Agreement. Specht has appealed the trial court's decision to the Washington State appellate court.

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