The elements of notice and manifestation of assent apply to internet contracts
239 US courts have found that the terms of contracts formed over the internet are valid and enforceable on proof that the person had actual or constructive notice that the contract is subject to terms of use and that the person had done an affirmative act where a reasonably prudent user would understand that the act would be understood as manifesting assent to the terms of use. In Long v Provide Commerce Inc, 245 Cal App 4th 855, 861 (2016) it was said:
While Internet commerce has exposed courts to many new situations, it has not fundamentally changed the requirement that "[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract". (Nguyen v Barnes & Noble Inc. (9th Cir. 2014) 763 F.3d 1171, 1175).
240 US courts have articulated three types of internet contracts and developed standards for judging reasonable notice and manifestation of assent as to each type.
241 US courts place internet contract forms in one of three basic categories: "clickwrap", "browsewrap", or "sign-in wrap" agreements. US courts place the three forms of internet contracts on a spectrum of validity, with "clickwrap" and "sign-in wrap" agreements on one end of the validity spectrum and "browsewrap" agreements on the other. In re Facebook Biometric Information Privacy Litigation (at 1165) it was said:
Although there is no per se rule of validity or invalidity on either end, our Circuit has recognized that the closer digital agreements are to the clickwrap end of the spectrum, the more often they have been upheld as valid and enforceable.
242 First, websites are categorised by US courts as "clickwrap" agreements where the site requires a user to scroll through the terms of use and to affirmatively click a dialogue box labelled "I agree" or similar words of assent before the user is able to further use the site's services. In Feldman v Google Inc, 513 F Supp 2d 229, 235 to 237 (ED Pa, 2007) it was said:
To determine whether a clickwrap agreement is enforceable, courts presented with the issue apply traditional principles of contract law and focus on whether the plaintiffs had reasonable notice of and manifested assent to the clickwrap agreement. … Absent a showing of fraud, failure to read an enforceable clickwrap agreement, as with any binding contract, will not excuse compliance with its terms.
…
A reasonably prudent internet user would have known of the existence of terms in the AdWords Agreement. Plaintiff had to have had reasonable notice of the terms. By clicking on "Yes, I agree to the above terms and conditions" button, Plaintiff indicated assent to the terms. Therefore, the requirements of an express contract for reasonable notice of terms and mutual assent are satisfied. Plaintiff's failure to read the Agreement, if that were the case, does not excuse him from being bound by its express agreement.
243 US courts have held that provisions, such as restrictions on access, forum selection clauses, or arbitration agreements are validly entered into when they are included in the terms of use of an internet contract that complies with the "clickwrap" standard (see Segal v Amazon.com Inc, 763 F Supp 2d 1367, 1369 (SD Fla, 2011)).
244 Second, websites are categorised by US courts as "browsewrap" agreements when the site contains a notice that by accessing or using the services of the website, the user is agreeing to be bound by the site's terms of service. Characteristically, a site that presents a "browsewrap" does not have an "I agree" button or its equivalent. A user is able to use the website's services without being required to take any affirmative action to indicate his or her knowledge of or agreement to terms of use. The notice states that use of the site, something that the user is already doing when the notice is displayed, is a manifestation of assent.
245 In Be In Inc v Google Inc (ND Cal, No 12-CV-03373-LHK, 9 October 2013), the court rejected the plaintiff's argument that a valid contract was formed based on a link on the homepage on its website to its terms of service, which, if followed, led to a page titled "Terms of Service". The Terms of Use page stated, "by using and/or visiting this Website … you signify your agreement to these Terms of Use". The court held that this "browsewrap" form was not sufficient to establish contract formation. The plaintiff had failed to show that beyond the mere existence of the link, the defendants had reason to know that their mere use would be so interpreted.
246 In Nguyen at 1177, the Ninth Circuit gave examples of "browsewrap" agreements found by US courts to be invalid and unenforceable:
Whether a user has inquiry notice of a browsewrap agreement, in turn, depends on the design and content of the website and the agreement's webpage. … Where the link to a website's terms of use is buried at the bottom of the page or tucked away in obscure corners of the website where users are unlikely to see it, courts have refused to enforce the browsewrap agreement.
See, e.g., Specht, 306 F.3d at 23 (refusing to enforce terms of use that "would have become visible to plaintiffs only if they had scrolled down to the next screen"); In re Zappos, Inc., 893 F. Supp. 2d 1058, 1064 ("The Terms of Use is inconspicuous, buried in the middle to bottom of every Zappos.com webpage among many other links, and the website never directs a user to the Terms of Use."); [Van Tassell v. United Mktg. Grp., LLC, 795 F. Supp. 2d 770, 792-93 (N.D.Ill. 2011)] (refusing to enforce arbitration clause in browsewrap agreement that was only noticeable after a "multi-step process" of clicking through non-obvious links); Hines v. Overstock.com, Inc., 668 F. Supp. 2d 362, 367 (plaintiff "could not even see the link to [the terms and conditions] without scrolling down to the bottom of the screen - an action that was not required to effectuate her purchase").
247 The Ninth Circuit then went on to give examples of "browsewrap" agreements found by US courts to be valid and enforceable:
On the other hand, where the website contains an explicit textual notice that continued use will act as a manifestation of the user's intent to be bound, courts have been more amenable to enforcing browsewrap agreements. See, e.g., Cairo, Inc. v. Crossmedia Services, Inc., 2005 U.S. Dist. LEXIS 8450, at *4-5 (N.D. Cal. Apr. 1, 2005) (enforcing forum selection clause in website's terms of use where every page on the website had a textual notice that read: "By continuing past this page and/or using this site, you agree to abide by the Terms of Use for this site, which prohibit commercial use of any information on this site"). But see Pollstar v. Gigmania, Ltd., 170 F. Supp. 2d 974, 981 (E.D. Cal. 2000) (refusing to enforce browsewrap agreement where textual notice appeared in small gray print against a gray background). In short the conspicuousness and placement of the "Terms of Use" hyperlink, other notices given to users of the terms of use, and the website's general design all contribute to whether a reasonably prudent user would have inquiry notice of a browsewrap agreement.
248 US courts have enforced "browsewrap" agreements when the user has actual notice, when the user is a business that repeatedly accesses a website for competitive purposes, and when there is evidence that the user had constructive notice of the terms of use.
249 Third, the other form of internet contracts recognised by US courts is a "sign-in wrap" agreement. I am satisfied that I have that scenario in the present case.
250 Websites that notify users that there are terms of use, that make the terms available on a page accessible by hyperlink, and that require the user to do some act, such as click a "sign-in" button, are categorised by US courts as "sign-in wrap" agreements (Zaltz v JDate, 952 F Supp 2d 439, 451 to 452 (ED NY, 2013) and Fteja v Facebook Inc, 841 F Supp 2d 829, 835 (SD NY, 2012)).
251 In Fteja v Facebook Inc (at 835) the court enforced a forum selection clause in Facebook's terms of service. A notice below a "Sign Up" button stated, "By clicking Sign Up, you are indicating that you have read and agree to the Terms of Service," and a user had clicked "Sign Up". The court held that a valid agreement had been formed:
The phrase "Terms of Service" is underlined, an indication that the phrase is a hyperlink, a phrase that is "usually highlighted or underlined" and sends users who click on it directly to a new location - usually an internet address or a program of some sort. ...
In order to have obtained a Facebook account, Fteja must have clicked the second "Sign Up" button. Accordingly, if the phrase that appears below that button is given effect, when Fteja clicked "Sign Up," he "indicat[ed] that [he] ha[d] read and agree[d] to the Terms of Policy."
252 In Zaltz v JDate the defendant operated a paid subscription service over the internet called JDate. JDate's terms of service were accessible on the website via a hyperlink. A user was required to click on a check box next to text that notified the user that clicking the box was confirmation that the user had read and agreed to the terms of service. The user could click the box without actually following the link and reading the terms of service. The terms of service included a forum selection clause agreeing to California as the venue for any or all claims. The plaintiff filed a lawsuit against the defendant in New York. Based on the forum selection clause, the defendant moved to dismiss the complaint or, in the alternative, to transfer venue to California. The plaintiff declared that she could not recall agreeing to the terms. Uncontroverted evidence showed that she could not have become a member without clicking the box. The court enforced the forum selection clause, holding that the terms of service were reasonably communicated to the plaintiff.
253 In Arena v Intuit Inc (ND Cal, No 19-cv-02546-CRB, 12 March 2020), Intuit's website required each person wishing to use its online tax preparation service to keypunch in personal identification and a password on a "Sign-In" page and click a button labelled "Sign In". Immediately below the button was the following text: "By clicking Sign In, you agree to the Turbo Terms of Use, TurboTax Terms of Use and have read and acknowledged our Privacy Statement". The phrase "TurboTax Terms of Use" was a hyperlink to the "Terms". A consumer who clicked on the link and read the Terms would have arrived at an arbitration provision. The court categorised the Intuit website as having a "sign-in wrap" agreement. The court stated that the terms of a "sign-in wrap" agreement are validly undertaken when the evidence shows that the user was placed on inquiry notice of the existence of terms of use, such as by hyperlinked text, and manifests assent by clicking on a "sign-in" button. But the court found that TurboTax's site did not reasonably communicate the existence of terms to a reasonably prudent user because the hyperlinks were in a significantly lighter font and the page contained multiple confusingly similar hyperlinks.
254 A website containing a "sign-in wrap" form of agreement will satisfy the inquiry notice standard if it provides the person with a legitimate opportunity to learn that his or her use is subject to terms of use, even if the person does not take the opportunity. A reasonable user would know that by clicking the registration button, he was agreeing to the terms and conditions accessible via the hyperlink, whether he clicked on the hyperlink or not. Whether a user actually reads the terms is considered by US courts to be irrelevant to formation of a valid contract (Fteja v Facebook Inc at 839).
255 I accept on the facts before me that a US court would find that the Instagram website offered a "sign-in wrap" form of agreement to users. The Instagram website pages contained hyperlinks to its original Terms of Use. The design of the website required users to perform an affirmative manifestation of assent by clicking a "Register" button. A US court would likely find that Instagram's "sign-in wrap" website met the objective standards. It provided notice to a reasonably prudent user that there were original Terms of Use. And it required the user to knowingly perform an affirmative act that a reasonably prudent user would understand to be a manifestation of assent to the original Terms of Use.
256 Of course, I would similarly conclude based upon Australian law which in my view embraces analogous notions and is what I must apply given the choice of law principles applicable to contract formation. Let me at this point then turn to some facts.
257 It is appropriate that I set out various provisions of the original Terms of Use as they appeared on Instagram's website.
258 At the top, in a shaded box, appeared the following included as a notification of the arbitration clause.
259 Then there were set out "Basic Terms". There were 17 of these. For present purposes I do not need to set them out, save for clauses 13 to 17 which provided:
13. You must not interfere or disrupt the Service or servers or networks connected to the Service, including by transmitting any worms, viruses, spyware, malware or any other code of a destructive or disruptive nature. You may not inject content or code or otherwise alter or interfere with the way any Instagram page is rendered or displayed in a user's browser or device.
14. You must comply with Instagram's Community Guidelines, available here: https://help.instagram.com/customer/portal/articles/262387-community-guidelines.
15. You must not create accounts with the Service through unauthorized means, including but not limited to, by using an automated device, script, bot, spider, crawler or scraper.
16. You must not attempt to restrict another user from using or enjoying the Service and you must not encourage or facilitate violations of these Terms of Use or any other Instagram terms.
17. Violation of these Terms of Use may, in Instagram's sole discretion, result in termination of your Instagram account. You understand and agree that Instagram cannot and will not be responsible for the Content posted on the Service and you use the Service at your own risk. If you violate the letter or spirit of these Terms of Use, or otherwise create risk or possible legal exposure for Instagram, we can stop providing all or part of the Service to you.
260 Later, there was set out an arbitration clause which provided:
Arbitration
Except if you opt-out or for disputes relating to: (1) your or Instagram's intellectual property (such as trademarks, trade dress, domain names, trade secrets, copyrights and patents); (2) violations of the API Terms; or (3) violations of provisions 13 or 15 of the Basic Terms, above ("Excluded Disputes"), you agree that all disputes between you and Instagram (whether or not such dispute involves a third party) with regard to your relationship with Instagram, including without limitation disputes related to these Terms of Use, your use of the Service, and/or rights of privacy and/or publicity, will be resolved by binding, individual arbitration under the American Arbitration Association's rules for arbitration of consumer-related disputes and you and Instagram hereby expressly waive trial by jury. As an alternative, you may bring your claim in your local "small claims" court, if permitted by that small claims court's rules. You may bring claims only on your own behalf. Neither you nor Instagram will participate in a class action or class-wide arbitration for any claims covered by this agreement. You also agree not to participate in claims brought in a private attorney general or representative capacity, or consolidated claims involving another person's account, if Instagram is a party to the proceeding. This dispute resolution provision will be governed by the Federal Arbitration Act. In the event the American Arbitration Association is unwilling or unable to set a hearing date within one hundred and sixty (160) days of filing the case, then either Instagram or you can elect to have the arbitration administered instead by the Judicial Arbitration and Mediation Services. Judgment on the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any provision of applicable law notwithstanding, the arbitrator will not have authority to award damages, remedies or awards that conflict with these Terms of Use.
You may opt out of this agreement to arbitrate. If you do so, neither you nor Instagram can require the other to participate in an arbitration proceeding. To opt out, you must notify Instagram in writing within 30 days of the date that you first became the subject to this arbitration provision. You must use this address to opt out:
Instagram, LLC ATTN: Arbitration Opt-out 1601 Willow Rd. Menlo Park, CA 94025
You must include your name and residence address, the email address you use for your Instagram account, and a clear statement that you want to opt out of this arbitration agreement.
If the prohibition against class actions and other claims brought on behalf of third parties contained above is found to be unenforceable, then all of the preceding language in this Arbitration section will be null and void. This arbitration agreement will survive the termination of your relationship with Instagram.
261 Then there was a governing law and venue provision in the following terms:
Governing Law & Venue
These Terms of Use are governed by and construed in accordance with the laws of the State of California, without giving effect to any principles of conflicts of laws AND WILL SPECIFICALLY NOT BE GOVERNED BY THE UNITED NATIONS CONVENTIONS ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, IF OTHERWISE APPLICABLE. For any action at law or in equity relating to the arbitration provision of these Terms of Use, the Excluded Disputes or if you opt out of the agreement to arbitrate, you agree to resolve any dispute you have with Instagram exclusively in a state or federal court located in Santa Clara, California, and to submit to the personal jurisdiction of the courts located in Santa Clara County for the purpose of litigating all such disputes.
If any provision of these Terms of Use is held to be unlawful, void, or for any reason unenforceable during arbitration or by a court of competent jurisdiction, then that provision will be deemed severable from these Terms of Use and will not affect the validity and enforceability of any remaining provisions. Instagram's failure to insist upon or enforce strict performance of any provision of these Terms will not be construed as a waiver of any provision or right. No waiver of any of these Terms will be deemed a further or continuing waiver of such term or condition or any other term or condition. Instagram reserves the right to change this dispute resolution provision, but any such changes will not apply to disputes arising before the effective date of the amendment. This dispute resolution provision will survive the termination of any or all of your transactions with Instagram.
262 On the evidence, an arbitration agreement was, in fact, formed. Let me elaborate.
263 The evidence establishes that any person who wished to open an Instagram account was presented with an initial registration or sign up screen where there were hyperlinks allowing them to view the original Terms of Use prior to creating an Instagram account. If a user chose to proceed to create an Instagram account, the user was required to confirm at the point of registration that he or she agreed to the original Terms of Use. For example, one of the screenshots in evidence states "By clicking Register you are indicating that you have read and agreed to the Terms of Service and Privacy Policy". The wording sometimes differed slightly. For example, as seen in the second example in evidence, the language was not "By clicking Register" but "By tapping to continue". But throughout the period, there were always words by which the user recognised that by proceeding to create an Instagram account, he or she was agreeing to the original Terms of Use and privacy policy. This was the case for users in all jurisdictions around the world, even though the sign up page may have appeared in languages other than English in some locations. There were always words by which the user recognised that by proceeding to create an Instagram account, he or she was agreeing to the original Terms of Use and privacy policy.
264 After they had opened an account in this way, Instagram users were also able to access the original Terms of Use in various ways on the Instagram website and the Instagram app. In particular, the original Terms of Use were published via:
(a) a "Terms" hyperlink that appeared in the footer of the Instagram website www.instagram.com when viewed from an internet browser on a computer or mobile device; and
(b) on screens within the Instagram app for mobile devices, accessible by navigating through the Settings menus.
265 I have set out the relevant terms earlier. But it is worth repeating that the original Terms of Use stated in a text box that appeared in a different colour to the colour of the surrounding webpage and prominently displayed at the top of the page under the heading "Terms of Use" that:
By accessing or using the Instagram website, the Instagram service, or any applications (including mobile applications) made available by Instagram (together, the "Service"), however accessed, you agree to be bound by these terms of use ("Terms of Use"). The Service is owned or controlled by Instagram, LLC ("Instagram"). These Terms of Use affect your legal rights and obligations. If you do not agree to be bound by all of these Terms of Use, do not access or use the Service.
…
ARBITRATION NOTICE: EXCEPT IF YOU OPT-OUT AND EXCEPT FOR CERTAIN TYPES OF DISPUTES DESCRIBED IN THE ARBITRATION SECTION BELOW, YOU AGREE THAT DISPUTES BETWEEN YOU AND INSTAGRAM WILL BE RESOLVED BY BINDING, INDIVIDUAL ARBITRATION AND YOU WAIVE YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION LAWSUIT OR CLASS-WIDE ARBITRATION.
266 In my view, the structure and content of the "sign-in wrap" agreement on the Instagram website placed a reasonably prudent person on notice that his or her use was subject to the original Terms of Use.
267 First, the notice of the existence of the original Terms of Use on the Instagram website was conspicuous. As I have said, the Instagram website required users to register by clicking a button. Immediately above the "Register" button, a user was presented with the following text: "By clicking Register you are indicating that you have read and agreed to the Terms of Service and Privacy Policy". The notice that clicking the "Register" button signified agreement to the "Terms" was conspicuous and was not obscured or hidden. The Instagram website placed a reasonably prudent user on notice of the consequences of clicking the "Register" button. And clicking was the relevant affirmative act.
268 Second, the notice provided users with a means to satisfy their inquiry. A valid contract may be formed where a reasonably prudent user is placed on constructive notice of the existence of terms of use. The content of the Instagram website placed a reasonably prudent user on notice that there were the original Terms of Use. Moreover, the website provided hyperlinks that enabled a reasonably prudent user to access the original Terms of Use and satisfy his or her inquiry should he or she have so desired.
269 Third, although the standard is just a reasonably prudent user, Dialogue was a highly sophisticated user of internet websites. The text, "By clicking Register you are indicating that you have read and agreed to the Terms of Service and Privacy Policy," with its hyperlinks, would surely be understood by a sophisticated user of internet websites to mean, "Click here to signify your agreement to the Terms of Use". Let me delve more into the detail.
270 Dialogue, by its employees, servants or agents, created numerous Instagram accounts including, relevantly, @schedugram on 12 January 2014, @BenSchedugram on 31 July 2017, and @getskedsocial on 31 January 2018, which were opened during the currency of the original Terms of Use. Mr Stephens accepted that these three accounts were created by Dialogue's agents.
271 The process of creating those accounts required Dialogue to confirm, at the point of registration, that it agreed to the original Terms of Use and privacy policy. Clearly, Dialogue had been provided with the original Terms of Use at the point of registration, had been given a reasonable opportunity to consider those original Terms of Use, and confirmed its acceptance of the original Terms of Use.
272 Now Mr Michael Duffey, an eDiscovery / litigation case manager at Facebook, Inc gave the following evidence which I accept, partly based on business records; I have rejected Dialogue's admissibility challenges.
273 In order to access or use the Instagram service, or to register to use the service or create an account, a user had to agree to the Terms of Use. The original Terms of Use applied to all users in the United States and Australia.
274 Throughout 19 January 2013 to 19 April 2018, being the period during which the original Terms of Use were operative, it was always the case that any person who wished to open an Instagram account was presented with an initial registration or sign up screen where there were hyperlinks allowing them to view the original Terms of Use prior to creating an Instagram account. The original Terms of Use, via those hyperlinks, were publicly and freely accessible. I have just described the process for creating an account and accessing the original Terms of Use.
275 Further, Mr Duffey gave evidence that the basic subscriber information (BSI) for various Instagram accounts created by Dialogue or its agents showed that they were associated with Dialogue's primary IP address, inter-alia, as follows:
(a) the BSI for @BenSchedugram contained Dialogue's primary IP address 328 times; and
(b) the BSI for @getskedsocial contained Dialogue's primary IP address 550 times.
276 Further, Dialogue used some of the accounts at least in the following ways:
(a) for @schedugram, to make at least six posts between January 2014 and May 2014; and
(b) for @BenSchedugram, to make at least 17 posts between 29 October 2017 and 5 July 2018, inclusive.
277 Further, Mr Duffey said that the three accounts @schedugram, @BenSchedugram and @getskedsocial could only have been created by the user following the process described earlier which required confirmation, at the point of registration, that Dialogue agreed to the original Terms of Use. Let me deal with some other evidence.
278 In my view Dialogue has behaved in a manner that manifested its acceptance of the original Terms of Use. Since at least 14 January 2014, Dialogue had actual knowledge of the original Terms of Use, quoting their specific provisions and discussing them at length in correspondence with Instagram's representatives. And indeed, with this actual knowledge of the Terms of Use, Dialogue continued to access and use the Instagram platform.
279 Now Mr Stephens gave evidence as to the five Instagram accounts and the dates on which they were created. The first account was created before Dialogue's incorporation and outside the relevant period during which the original Terms of Use were operative. The other four accounts, to the extent they are or were active, have been used by Dialogue for testing and marketing activities. Three of these accounts were created during the currency of the original Terms of Use. Let me just focus on these three accounts.
280 Mr Stephens did not recall if he created, or directed Dialogue's contractors to create, these three accounts. The accounts appear to have been created by Dialogue's contractors. But he said that if any of the accounts were created by him, he did not recall if he consented to the terms, and if so, which terms they were. He said that any arbitration provisions were not brought to his attention, and he was not aware of them.
281 He said that none of the three accounts have been or are being used by Dialogue to provide services to clients. Dialogue provides services to clients by interacting with Instagram on behalf of the clients. Any interaction by or through Dialogue's product with a client's Instagram account is done by Dialogue as agent for the client and not by Dialogue in its own right. Clients provide their Instagram login details to Dialogue on a confidential basis, and Dialogue's product uses the login details to manage the publishing and planning of the client's organic marketing content. Instead of the client publishing the content itself, Dialogue does it on the client's behalf through an automated process. When accessing clients' accounts by using their login details, Dialogue does not see and is not required to acknowledge or accept any terms of use. Dialogue had clients whose Instagram accounts were created during the relevant period in which the original Terms of Use were operative.
282 Now Mr Stephens appeared to indicate in his evidence that in 2014 and thereafter at the time that the various accounts that I have referred to earlier were opened, that he was not aware of the original Terms of Use.
283 But on the preponderance of the evidence I am satisfied that he or his agents had knowledge of or at least adequate notice of the original Terms of Use at the time such accounts were opened and thereafter.
284 Indeed, emails sent between Mr Stephens and Mr Stephane Crozatier of Facebook in January 2014 well indicate that Mr Stephens was aware of the original Terms of Use including the basic terms at this earlier time.
285 Moreover, even if he did not have knowledge before the accounts were opened, he had knowledge later, and with such notice continued to use them. Accordingly, there was relevant ratification.
286 Further, Dialogue, by its employees, servants or agents, accessed and used the accounts @schedugram, @BenSchedugram and @getskedsocial and in my view can be taken to have had knowledge or notice of the original Terms of Use at the time of such activities.
287 Let me move to another matter. Dialogue expressly referred to the Terms of Use in its own terms of service from 3 April 2016 to 24 May 2018 in respect of Schedugram and 25 May 2018 to 25 February 2020 in respect of Sked Social, in a manner that confirmed the application of both the original Terms of Use and the revised Terms of Use to the use of those Instagram accounts.
288 In Dialogue's terms of service for Schedugram applying between 3 April 2016 and 24 May 2018 it was expressly stated:
2 The Service
1. We grant you a non-exclusive, worldwide, non-transferable, revocable right to use the Service in accordance with these Terms.
2. You may access and use the Service (including any incidental copying that occurs as part of that use) in accordance with these Terms. You may also print one copy of any page within the Service for your own personal, non-commercial use.
3. By logging into the Service and inputting your Instagram account details into the Service, you grant us the right and appoint us as your agent to use any information or content provided by you to conduct actions on your behalf, at your direction (such as posting that content to Instagram) in providing you the Service.
4. You acknowledge and agree that the Service is not affiliated with or authorised by Instagram, and any access to Instagram (including via the Service) is governed by Instagram's Terms of Use.
5. The Service contains links to other websites as well as content added by people other than us. We do not endorse, sponsor or approve any such user generated content or any content available on any linked website.
…
289 Dialogue's terms of service for Sked Social between 25 May 2018 and 25 February 2020 contained similar wording. Other wording, albeit similar was used in Dialogue's terms of service after 25 February 2020.
290 Clause 2, sub-clause 4, which I have set out above, is notable. Moreover, there were other provisions requiring Dialogue's customers to comply with the Terms of Use.
291 Finally, it is ironic that Dialogue's own terms of service contained stipulations such as (see the form from 25 May 2018):
Terms of Service
These Terms of Use (Terms) govern your use of our website located at https://skedsocial.com (including subdomains), the Sked Social service, and any applications provided by us (collectively Service), and form a binding contractual agreement between you, the user of the Service and us, Dialogue Consulting Pty Ltd ACN 153 007 259 (trading as Sked Social). These Terms should be read in conjunction with our Privacy Policy.
For that reason these Terms are important and you should ensure that you read them carefully and contact us with any questions before you use the Service. You can contact us on 1300 846 768 (Australia) or +61 1300 846 768 (International).
By registering to use or using the Service you acknowledge and agree that you have had sufficient chance to read and understand the Terms and you agree to be bound by them. If you do not agree to the Terms, you must not use the Service.
292 Dialogue sought to enter into internet contracts with its own customers by a mode similar or perhaps less secure to what Instagram, LLC was using, which Dialogue now challenges.
293 Dialogue says that the question of what amounts to a reasonable opportunity to consider the terms depends on the circumstances. It says that the alleged arbitration clause was not one reasonably to be expected when creating an Instagram account. Accordingly, something more was required by way of provision of information about the clause to the acceptor before the contract was formed. It says that according to Maxitherm Boilers Pty Ltd v Pacific Dunlop Ltd [1998] 4 VR 559, special steps must be taken to bring an unusual term to the attention of the other party, as otherwise it may not be reasonable to assume assent to the term.
294 I must say that Callaway JA's observations (at 562) are worth setting out. He said:
It is not uncommon to enter into a transaction on another party's standard terms and conditions without enquiring what they are. It is often not worth doing so and a sensible commercial risk to run. The law reflects commercial reality by holding the party who does not enquire to such of the other party's standard terms and conditions as may fairly be regarded as within the risk the first party took. Some terms are outside the risk and the first party is not bound by them. A term may be contrary to industry practice or, however appropriate to other contracts into which the other party regularly enters, unsuited to the particular contract. It is rarely, if ever, sufficient that a term is onerous, but its onerous quality or some other feature may show that it was not reasonably to be expected.
295 In my view these observations are not helpful to Dialogue. Either Dialogue knew of the original Terms of Use or chose not to enquire. Further, the arbitration clause was not that unusual. Further, its existence was specifically highlighted at the top of the original Terms of Use and in capitals. If special steps were required, these were undertaken.
296 Further, Dialogue says that the present case is distinguishable from Gonzalez, which considered, in the context of a personal injury claim, an exclusive jurisdiction clause in an online travel agency's standard term. Button J said that the absence of a "tick a box" step with regard to the exclusive jurisdiction clause was significant but not determinative, and observed that the statement requiring the user's agreement to the standard terms appeared before the "book now" button and the user had been emailed a booking confirmation. In contrast, in the present case, Dialogue says that the Instagram account creation process did not provide sufficient notice to Dialogue of the original Terms of Use, let alone the alleged arbitration agreement or the right to opt out of it within 30 days. I would say now that I disagree. Contrary to Dialogue's submissions, Gonzalez cannot be relevantly distinguished from the present case. In both cases, a user who wished to "Register" or "Book Now" was informed that by doing so he or she agreed to the terms and conditions, and was presented with a link to the relevant terms and conditions. The link to the terms in Gonzalez appeared on the "Payment Details" page, which appeared before the "Book Now" button appeared. The important question was whether the terms were readily available to Ms Gonzalez. They were. In the context that I am considering, the original Terms of Use were readily available to Dialogue, and Dialogue objectively assented to them. Clearly, it is not the subjective beliefs of the parties about their rights and liabilities that govern their contractual relations. Rather, the question is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.
297 Finally, and even assuming admissibility, Dialogue criticised aspects of Mr Duffey's evidence concerning the opening of Instagram accounts. But I do not need to set out the detail. In my view its criticisms were flimsy.
298 In my view, by its conduct, Dialogue accepted and agreed to abide by the original Terms of Use. Dialogue thereby under Australian law, alternatively under US law, formed an agreement to arbitrate with Instagram, LLC, the terms of which were set out in the original Terms of Use. Moreover, Dialogue did not opt out of the arbitration agreement.
299 So, Dialogue and Instagram, LLC are parties to an arbitration agreement within the meaning of s 3(1) of the IAA. Dialogue and Instagram, LLC are parties to an "agreement in writing" of the kind referred to in Art II(1) of the Convention and s 3(1) of the IAA.
300 Let me now deal with some technical arguments of Dialogue. Dialogue points out that s 7 of the IAA applies only where there is an "arbitration agreement". Section 3(1) defines "arbitration agreement" as an agreement in writing of the kind referred to in Art II(1) of the Convention. Article II(1) of the Convention refers to "an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration". Article II(2) defines "agreement in writing" as including an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. Section 3(4) of the IAA states that an agreement is in writing if its content is recorded in any form whether or not the agreement or the contract to which it relates has been concluded orally, by conduct, or by other means, or it is contained in an electronic communication and the information in that communication is accessible so as to be usable for subsequent reference.
301 Dialogue says that the arbitration agreement on which the respondents rely was not contained in any exchange of relevant documents. First, there was no "bilateral" recognition of the arbitration agreement. Second, Dialogue did not "sign" the original Terms of Use. Third, there is no "written proof" or "written acceptance" of Dialogue's assent to the "arbitration agreement", nor is there any other form "recording" the content of the agreement. Fourth, there was no "clear mutual documentary exchange as to the terms of, or assent to, the arbitration agreement". Rather, Dialogue says that any assent by it, if there was any, was in the realm of tacit approval or acquiescence only.
302 Further, Dialogue says that the question is not whether a contract has been formed just under Australian common law, but rather whether there is an agreement in writing for the purposes of the Convention. Dialogue says that this standard of formation of an agreement may be more exacting than the requirements for the formation of a contract under Australian common law.
303 In summary, it says that no arbitration agreement was formed because there was no agreement in writing for the purposes of Art II(2) of the Convention as there was no arbitral clause in a contract or an arbitration agreement signed by the parties or contained in an exchange of letters or telegrams.
304 But I agree with the respondents that the consequence of Dialogue's submissions would be surprising. It would follow that an arbitration agreement could only be achieved by a traditional written agreement signed by both parties, or by an exchange of letter or telegrams. But in my view the arbitration agreement satisfies Art II(2) of the Convention because it is an "exchange of letters or telegrams". The concept of an "exchange" encompasses more modern, electronic methods of electronic communication. Accordingly, where the arbitral clause has been contained in an exchange of "electronic communications" at the time of registration, as in this case, that will suffice.
305 Further, it is significant that Art II(2) gives a non-exhaustive meaning to the term "agreement in writing". The text of Art II(2) was drafted in 1958, at a time when the concept of formation of contracts by digital technology, including over the internet, was unknown although perhaps not unforeseen by some. Further, in 2006 UNCITRAL considered the "wide use of electronic commerce" and recommended that Art II(2) of the Convention be "be applied recognizing that the circumstances described therein are not exhaustive" (Recommendation regarding the interpretation of article II, paragraph 2, and article VII, paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10 June 1958, adopted by the United Nations Commission on International Trade Law on 7 July 2006 (UN Doc A/6/17)).
306 This conclusion is also consistent with both the objects and purposes of the Convention and the IAA. Relevantly, ss 2D and 39 of the IAA require me to interpret the IAA, which applies the Convention, to facilitate:
(a) international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and
(b) the use of arbitration agreements made in relation to international trade and commerce.
307 Accordingly, Art II(2) should be construed flexibly and non-exhaustively in light of modern methods of communication; sclerotic textualism should be eschewed. Art II(2) applies to "sign-in wrap" or "clickwrap" agreements. Indeed, it could hardly be doubted that the term "include" in the text of Art II(2) was designed to allow national courts to add additional types or categories of agreements in writing to the catalogue of those listed in Art II(2). I should say for completeness that Art 7(2) to (4) of the Model Law have similar if not broader amplitude.
308 In summary, Dialogue accepted and is bound by the original Terms of Use and the arbitration agreement in them. Therefore, a valid arbitration agreement was formed. There is an arbitration agreement within the meaning of s 3(1) of the IAA.