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Welcome to the next wave of contracting: The Clickwrap Era

January 10, 2023 4 min read

Let’s face it – we’re in the middle of a fundamental shift. 

Whatever we call this next phase, it’s certain to force the entire economy to completely rethink how and where we spend resources. Strong profit margins are again a must-have, and cheap dollars aren’t boundlessly available to fuel endless headcount. At the very same time, competing for each customer’s dollars and attention will be tougher than before. Time matters for them, too, and every bit of friction that can be taken out of the buying process can become a competitive advantage.

Good news: There are winners – even in this environment – that have had success with that formula. Figma, recently acquired by Adobe, is a great example of a business that grew with a product-led, viral growth motion that allowed users to engage how and when it wanted to.

But can you imagine what the world would’ve looked like if Figma had to negotiate, process, and sign up every customer with a traditional contract? What about things like NDAs, terms and conditions, and simple commercial agreements? And what about basic legal terms like Figma might have offered? 

World Commerce & Contracting cites a study where it costs $6,900 to generate, redline, and store one simple contract like an NDA. While I’m not an actuarial expert, I’d argue that you’re financially underwater the second you have an attorney. 

Welcome to the next wave of contracting: the Clickwrap era

A clickwrap is an online agreement that users agree to simply by clicking a button or checking a box that says “I agree.” By clickwrap-itizing (that’s a word I just made up) as much of your contract stack as possible, it’s an opportunity to take that headcount spend needed to review an NDA down to zero. Using tools like Ironclad Insights to understand how and where your contracts are modified, making tweaks to draft for fairness, speed, and accepting without changes. Leveraging Ironclad Legal Centers to shorten lengthy contracts by referencing online terms. And finally, visually reinforcing that there’s no opportunity to negotiate by leveraging digital clickwraps.

But that’s just the beginning of how leveraging clickwraps can help your business get ahead.

Your contract experience will enable a competitive advantage, or become a death knell

After all of that, now imagine a world where your CEO gives you a phone call and says: 

“Hey, we’re going to sell all our products via a self-service basis to customers via the website”

 Or, maybe if you’re a business working with consumers directly:  

“Our competitor just rolled out a way to sign a membership agreement in two clicks from their app.”

Did some instant panic just set in about how you’d adapt your existing contracting stack? Don’t worry, you’re not alone. 

For a majority of companies, all that time and effort you just spent trying to perfect your negotiation playbook or PDF-based contract generation tooling just went out the window. We’ve seen it time and time again, when push comes to shove, legal can’t block the business from driving into a new digital era without risking developing a reputation as the dreaded “Department of No.”

If you’re leading an in-house legal team, this is an opportunity to proactively drive value from the legal department in new ways – instead of being caught in a reactive state. 

Take for example ExtraSpace Storage.

Before Ironclad, ExtraSpace had a labyrinth of technical systems & human-driven workflows to generate thousands of different of lease permutations that customers were required to come in-person to sign. The result was a similar story as we’ve laid out above – it was an expensive process built around PDF signature systems with lots of tech that required humans to run, and customers will still dissatisfied.

Starting before the pandemic, ExtraSpace began a journey to allow customers to sign a lease online, via series of clickwraps, so they could enable a fully human-free leasing experience. Sign ups increased, costs to maintain went down, and it enabled the company to stay open and stay up with business during the COVID-19 shutdown in 2020. More on that story here. 

But Ironclad Clickwrap isn’t just for those that need to transform how they work. It’s for those that are already living a digital world, too. 

First principles still matter: You still need insight and records for your contracts 

What happens when a consumer economy gets tighter?

Consumers and businesses, simply, dispute more contracts and purchases. Predatory plaintiffs lawsuits and frivolous discovery requests ramp up. Regulatory bodies increase scrutiny – more inquiries, more audits, perhaps more consent decrees, it’s all out there. 

The fear around turning that NDA or other contract we mentioned above into a clickwrap is the traditional belief that clickwraps are a tolerated risk. We rely on circumstantial evidence to enforce them, poor practices to update them, and it leads to a black-box effect that routinely leaves businesses unable to 

From the second we started our Clickwrap product line, Ironclad has invested thousands of hours into understanding exactly what businesses need to capture to ensure a clickwrap agreement is just as effective as any other type of contract. Per what we’ve found in our annual clickwrap litigation trends report, It’s relatively simple: (1) clearly show that the user was put on actual or constructive notice of the terms, (2) capture clear metadata – like the IP address and device info of who accepted, and (3) be able to clearly show what version of the terms they agreed to at a given point in time.

Our recent Clickwrap Next Gen release helps organizations streamline how they bring rigor to their clickwrap processes with new key adds. Clickwrap Guides helps organizations playbook how they build every clickwrap in a new digital experience and execute on a build far more quickly than ever before, while Ironclad’s new unified repository allows organizations to see every single contractual acceptance in their ecosystem in one single pane of glass – whether it’s a highly negotiated agreement, or a standard set of online terms. 

Sign up for a free custom demo and see what Ironclad Clickwrap can do for your business. 

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Kyle Robbins is a former attorney turned Ironclad’s Head of Sales for the Ironclad Clickwrap product line. He’s spent nearly a decade in legal tech, focused almost exclusively on the inner-workings of clickwrap agreement programs. Kyle holds a BS from DePauw University, and his JD from Indiana University’s Maurer School of Law. When he’s not talking about clickwraps, chances are you’ll find battling his love/hate relationships with his 4-iron, half-marathons, and Indiana Hoosier football.