Tips for Designing Clickwrap Agreements

Most websites and apps use a clickwrap agreement to collect acceptance to online agreements from users and consumers. It is the fastest and most effective way to collect acceptance to your online terms. The design of the clickwrap on the screen and the records being maintained on the back-end will determine whether or not the Terms of Service presented is enforceable in court. In fact, 43% of companies last year failed to enforce their online terms because of poor screen design. To follow best practices, your clickwrap screen should be designed in a way that highlights the existence of the agreement and makes it clear to the user that completing an action indicates acceptance of the agreement. The courts consider everything from the color of the hyperlink to the size of the text and it’s proximity to the “I agree” button. This blog dives into best practices for designing clickwrap agreements for enforceability.

Online agreements are typically presented in one of three ways:

• Clickwrap: Presented as a box or button that says “I agree” that a user must check to accept terms.
• Sign-in wrap: Agreed to by completing another action (“By clicking “sign up” you agree to our Terms of Service”)
• Browsewrap: Presented as a hyperlink usually at the bottom of a screen alongside notice that “By using [this website] you agree to the Terms of Service.”

In order to be enforceable, the user must be put on notice: the agreement must be clearly presented to the user, the user must know that the agreement exists, have time to consider it, and give their affirmative assent to it. Browsewrap agreements typically fail at providing notice to the user because of its location and because it doesn’t require the user to take action to assent to the agreement. On the other hand, since clickwrap agreements require users to click a button or check a box, it is the gold standard when it comes to collecting acceptance. Sign-in-wraps, a hybrid of clickwrap and browsewrap, could go either way, depending on the design of the screen.

In order for the user to be put on notice, your terms must be conspicuously presented. This means that notice of the existence of the agreements cannot be hidden on the page, too far away from their corresponding button, or muted in color on the screen. 

Acceptance method: Using a clickwrap is a more enforceable way to present your agreement because it uses a single purpose button (a button whose purpose is only to accept terms). Clicking the button or checking the box makes it clear the meaning of the action, and there’s little confusion as to whether the user received notice. A sign-in-wrap is less secure because of its dual purpose button (a button whose purpose is two-fold: agreeing to the terms and completing the transaction). Browsewraps must be avoided because they rarely put users on notice and have a low rate of enforceability in court.

Hyperlink: The hyperlink has to be recognizable as a hyperlink. Your best bet is to make it bright colored blue and underlined. It should not be the same color as the background color or blend in in any way. If the contrast of the hyperlink containing the agreement isn’t strong enough, it can be argued that the user was not put on sufficient notice. 

Background color: The background color must strongly contrast the hyperlink and the language surrounding the agreement. If the background does not provide enough of a contrast, then it can be easy to argue that there was no notice. 

Proximity: The agreement language, hyperlink, and acceptance buttons must be placed within close proximity of each other to make it maximally clear that they relate to each other and that accepting the agreement is a direct consequence of clicking the button or checking the box.

These are all just some of the very important elements of screen design. But if you’re not keeping comprehensive back-end records of acceptance in your contract management system or elsewhere, then good screen design may be in vain. 

Comprehensive recordkeeping is one of the biggest challenges that legal and technical departments face with their homegrown management system for their online legal terms. Back-end records must be able to show that a particular user signed a particular version of a specific agreement. This means tracking several data points (name, email, IP address, device type, etc) and attributing it to assent to a specific agreement. This also means being able to track when updates are made and which users assented to updated agreements.

Making updates to terms

As businesses grow and evolve, so will their needs, relationships with customers, and regulations they have to follow. In the last three years, there have been a few major data privacy regulations enacted, including GDPR and CCPA, that have stricter requirements regarding transparency into their data processing practices. If asked, you need to be able to prove (with back-end records) that users consented to your practices, and that those who have requested to opt out had their requests fulfilled. Legal terms will undergo constant updates, and you will need to collect records of their acceptance each time.

Tracking and version control

There needs to be record not only of a user’s original acceptance of a company’s terms, but also of each updated version following. It is important to correctly tag and track a user and the version of the terms they agreed to, as well as other information that authenticates the user.

Pulling records

Ideally, pulling records is easy and automated, eliminating the need for tedious e-discovery. Maintaining a centralized location for versioned agreements and acceptances will help with this. Especially when defending a compliance violation.

Tracking and maintaining individualized records is tedious in homegrown terms management systems. Without a full-time team dedicated primarily/only to managing terms, this can take up too much dev resources. Ironclad’s clickwrap transaction platform designs clickwrap agreements with enforceability in mine. Our third-party terms management solution enables Legal to manage their agreements, all while maintaining a frictionless and secure experience. Learn more about best practices for enforceable clickwrap agreements here!