In the summer of 2017, over 20,000 people in the United Kingdom agreed to perform unpaid community service—tasks such as picking up animal waste from local parks, cleaning portable toilets, providing hugs to stray cats and dogs, and painting snail shells. Notably, however, this outpouring of civic generosity appears to have been entirely inadvertent. It occurred when public Wi-Fi provider Purple briefly inserted a new clause into its usual terms and conditions, requiring users to do 1,000 hours of community service in exchange for free Wi-Fi. Thousands of users took the deal, almost certainly without reading it. Kat Hall, “Wi-Fi Firm Purple Sneaks 'Community Service' Clause Into Its T&Cs,” The Register (July 13, 2017). Purple does not intend to enforce the provision; it pulled the prank to get some publicity and to make the point that people don't actually read online terms and conditions. Though that is certainly true, under the right circumstances these contracts can nevertheless be enforceable.

It may seem odd that you can be bound by a contract you haven't even read, but that is the law in most states, including New York. Offerees are generally presumed, as a matter of law, to know and agree to the terms of the offers they accept—even when they have only “passively” accepted them. Passive acceptance can include using a website or signing up for a service that has mandatory terms or use, but does not include an explicit “I ACCEPT” button. In such cases, where users have neither read the terms nor explicitly accepted them, the Second Circuit has held, “the contract-formation question will often turn on whether a reasonably prudent offeree would be on notice of the term at issue. In other words, where there is no actual notice of the term, an offeree is still bound by the provision if he or she is on inquiry notice of the term and assents to it through the conduct that a reasonable person would understand to constitute assent.” Schnabel v. Trilegiant, 697 F.3d 110, 120 (2d Cir. 2012); see also Stephen M. Kramarsky, “Click Here to Waive a Jury Trial: 'Nicosia v. Amazon',” N.Y.L.J. (March 17, 2015).

Inquiry notice cases are tricky and can turn on their specific facts. But they are also essential to the function of the modern Internet economy. Almost all online services are governed by terms of service, almost no one reads them, and many of them include material obligations and waivers—including agreements to arbitrate disputes, which are often a source of contention. In a recent case in the Southern District of New York against ride-hailing company Uber and its CEO, the court denied Uber's motion to compel arbitration, holding that its sign-up process did not adequately notify users of its terms of service (which contained the arbitration provision). Meyer v. Kalanick, 200 F. Supp. 3d 408 (S.D.N.Y. 2016). The Second Circuit's review and vacatur of that decision examines these issues in the context of the “reasonable smartphone user,” and it is worth a closer look.