Plaintiffs sued, Netscape, a software internet company who distributed the free software SmartDownload, for electronic eavesdropping. The Plaintiffs alleged Defendant violated two federal statutes, the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act, by capturing private information about files downloaded from the Internet . Plaintiffs filed suit against Defendant in District Court and Defendant moved to dismiss the case and compel arbitration. Defendant alleged that Plaintiffs had agreed to arbitrate any and all claims through their acknowledgment of the terms and conditions in the license agreement on the Web page. However, Plaintiffs were never required to read the entire terms and conditions prior to downloading the software. The District Court found that the downloading of the software did not constitute an acceptance of Defendant’s terms because there was no reasonably conspicuous notice. Defendant appealed. II. ISSUE
Whether the Plaintiffs agreed to be bound by the Defendant's licensing agreement terms when they downloaded the free software and plug-in, whereby agreeing to arbitration? III. RULE
In order for a contract to become binding, both parties must assent to be bound. "[C]ourts have required that assent to the formation of a contract be manifested in some way, by words or other conduct, if it is to be effective." E. Allan Farnsworth, Farnsworth on Contracts § 3.1 (2d ed.2000). "To form a contract, a manifestation of mutual assent is necessary. Mutual assent may be manifested by written or spoken words, or by conduct." Binder v. Aetna Life Ins. Co., 75 Cal.App.4th 832, 850, 89 Cal.Rptr.2d 540, 551 (Cal.Ct.App.1999) (citations omitted). IV. ANALYSIS
Online contracts must be held to the same standards as other written documents and terms therein must also be conspicuous. A consumer's clicking on a download button does...