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I am not sure if I have understood your question correctly. Do you mean to say that you want to display the terms & condition in a new window instead of downloading it?
I did test your form and the reason it is getting downloaded is because it is a work document file. Here are the steps I would suggest:
#1. Copy the content of the word document.
#2. Create a HTML file and paste the content of word document in the html file.
#3. Upload the file in your web server where you have the word document and grab the URL of the file.
#4. Add the URL of your HTML file in terms and condition widget.
Hope this helps.
Do get back to us if you have any questions.