A clickwrap agreement (also known as clickthrough or click-accept) is an agreement a user accepts by clicking a button or checking a box that says “I agree.” It is one of the quickest ways to collect user assent to your online legal agreements. By presenting these agreements as a box or button users check or click in order to agree, the sign up process is frictionless and data storage is secure (if done properly). But people often wonder whether or not clickwrap agreements are legally enforceable. Does checking that box or clicking that button count as a real contract? Can it hold up in a court of law?
Case law for clickwrap enforceability
Many legal cases have come to define the parameters of an enforceable clickwrap agreement. The following are three of the key legal cases:
Feldman v. Google
Feldman v. Google, Inc., stipulated that in order for a clickwrap agreement to be enforceable, users must be presented with “reasonable notice of the terms, and manifested assent of the agreement.” While the plaintiff argued that he did not enter into any agreement or sign any contract with Google, the courts found that he could not have proceeded with the purchase of advertisement without checking a box agreeing to the above terms and conditions, thereby making Google’s clickwrap terms enforceable.
Specht v. Netscape Communications Corporation
In Specht v. Netscape, the court determined that a clickwrap is enforceable if the terms are conspicuously presented, and that checking the box is akin to agreeing to the presented terms. Netscape tried to compel arbitration as per their agreement, but their agreement was too inconspicuously presented to be enforceable.
Bragg v Linden Research, Inc.
In the case of Bragg v. Linden Research, Inc., the courts decided against Linden Research, because while their clickwrap agreements were well-designed, they “exploited unequal bargaining power” in crafting oppressive, unconscionable terms. The case law for the legality of clickthrough shows that among other things, the enforceability of a clickwrap agreement is dependent upon its design and terms.
6 components of an enforceable clickwrap agreement
There are some best practices you need to use to create truly enforceable clickwrap agreements. Here are 6 components of an enforceable clickwrap agreement:
1. Users must give active affirmative consent
Clickwrap agreements must require users to actively click “I agree” to the Terms of Service or Terms and Conditions before they can proceed with their requested services. To enhance enforceability, design the site such that users cannot proceed without giving affirmative assent.
Active consent is best given when the user is made to check a box or click to affirm that they saw and accepted the terms presented by the company. It is bad practice to pre-check the box on behalf of the customer.
2. Give reasonable and prominent notice of your Terms of Service
Clickwrap Terms of Service need to be displayed prominently. Users have the responsibility to inform themselves of the terms before clicking “I agree.” In situations where the users have consented without reading the ToS, they’re said to have constructive knowledge. This is the benefit of presenting the Terms in a way that a reasonable person would be able to access and read.
3. Clickwrap agreements should be digestible to the average person
Your users are at an inherent disadvantage when it comes to understanding your online legal agreements. You cannot assume they can decipher legalese and tech talk; if you do, your clickwrap agreements are not likely to be enforceable.
Your clickwrap legal agreements need to be written in a way that someone without a background in privacy can read, comprehend, and give informed consent to. The agreement should contain all the terms that the user is charged with knowing.
4. Do not exploit unequal bargaining power
Your users only have the option to click agree or leave the site. You cannot use this advantage to take more from the user than necessary. Abuse of power can lead to a clickwrap agreement being deemed unenforceable. In contract law unequal bargaining power (contracts of adhesion) is frowned upon.
However, even with the lack of bargaining power eCommerce TOS are typically enforceable if they clearly list the requirements for use of the site, and avoid demanding the user to give up too much in order to use the site. Clickwrap agreements will typically be “take it or leave it” but they cannot be “we take all and you leave with nothing.”
5. Specific consents must be distinguishable from the rest of the document
Do not bury controversial terms of an agreement. For example, if your business plans to appropriate a user’s personal information for marketing purposes, you should request consent for that purpose in a manner that is distinct from the rest of the ToS.
Hidden consents can come back to haunt hosts who cannot enforce the ToS in whole or part because of the formation of the terms. The clearer and more distinguishable the terms and consents are, the more likely an agreement will be enforceable.
6. Maintain back-end records and version control
An important part of being able to enforce your clickwrap agreement is managing back-end records of acceptance and being able to produce an audit trail of versions accepted. Unless you are able to prove who accepted your agreements and which version(s) of your agreement they accepted, then your clickwrap agreement is not likely to be enforceable.
By tracking crucial acceptance data like time of acceptance, version of agreement, and other data that ties a specific user to an acceptance event, you will increase clickwrap enforceability in court.
Clickwrap enforceability: Next steps
If you are worried about the enforceability of your clickwrap agreements, check out Ironclad’s Clickwrap Litigation Trends report or request a demo of our clickwrap transaction platform!
- Case law for clickwrap enforceability
- 6 components of an enforceable clickwrap agreement
- Clickwrap enforceability: Next steps
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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.