According to the Third Circuit Court of Appeals, a customer's awareness that services are provided under a contract, coupled with his or her access to the terms of that contract, bind the customer to that agreement – including any arbitration provisions – whether or not the customer actually received a copy of the agreement.

In Schwartz v. Comcast Corp., No. 06-4855, 2007 WL 4212693 (3rd Cir. Nov. 30, 2007), Schwartz filed a class action lawsuit against Comcast for alleged interruptions in internet service. Comcast filed a motion to compel arbitration pursuant to an arbitration provision in the parties' Subscriber Agreement. In opposing the motion, Schwartz argued that he never entered into an arbitration agreement with Comcast.

The district court found that the parties had not entered into an arbitration agreement and thus denied the motion to compel. See Schwartz v. Comcast Corp., No. 05-2340, 2006 WL 3251092 (E.D. Pa. Nov. 8, 2006). In reaching this conclusion, the district court stated that Comcast's policy of providing all new customers with a copy of the Subscriber Agreement was not sufficient to prove that Schwartz had actual notice of or consented to the agreement.

On appeal, the Court reversed the lower court ruling. Specifically, the Court held that Comcast's policy of providing the Subscriber Agreement to all new customers was sufficient to prove that Schwartz had actual notice of the agreement and its arbitration provision. Comcast proved the existence of its policy by submitting the declaration and deposition testimony of a corporate official.

Moreover, Schwartz acknowledged in his complaint that he was aware of some underlying agreement between the parties. According to the Court, "[w]hether or not Schwartz received a copy… he could not accept services he knew were being tendered on the basis of a subscription agreement without becoming bound by that agreement."

The Court also observed that the terms of the Subscriber Agreement were available to customers at all times on the Comcast web site. Since Schwartz was aware of an underlying agreement and had access to its terms, the Court refused to excuse his ignorance of the particular terms of the contract.

Since the district court denied the motion to compel solely on the ground that there was no agreement to arbitrate, the Court remanded the matter to the district court to consider Schwartz's other arguments opposing arbitration – namely, an unconscionability challenge and an argument that the dispute was outside the scope of the agreement.

Other courts have held that the mere posting of terms of an agreement on an accessible portion of a website does not constitute actual notice itself. See Douglas v. United States District Court, 495 F.3d 1062 (9th Cir. 2007). However, Schwartz establishes a rule that a customer's awareness of an agreement with the company, coupled with the customer's access to its terms on the company web site, is sufficient to raise the presumption that the customer had actual notice of the agreement and its terms.