What Is Click-to-Accept?
Click-to-accept contracts allow a person to accept the terms of a contract with a single click. The reader is able to click a button or check a box that says “I agree” in place of a signature. These types of contracts are excellent for high-volume agreements that require little to no negotiation. They are especially useful for agreements that are “take it or leave it” and require a customer to accept terms before using a product or service. Related types of agreements also exist, such as sign-in-wraps and browsewraps, as well as eSignatures and embedded contracts.
Read on to learn more about click-to-accept contracts.
What is a click-to-accept contract?
A click-to-accept contract is a type of online agreement in which users agree to the terms with a single click that acts as a method of contract acceptance. Instead of the more difficult and time-consuming manual signature methods of the past, click-to-accept agreements streamline the process significantly. The act of signing is instead replaced with the click.
Click-to-accept contracts are the best way for companies to limit their potential risk without negative impacts on the customer experience or conversion. Companies are able to add these agreements to:
- Checkout flows
- Login pages
- Sign-up pages
- Terms and conditions updates
- License subscriptions and updates
- Business contract workflows.
Why is contract acceptance important?
Contract acceptance is a critical stage of the contract management process. At this stage, the other party is ready to agree to your terms and follow the requirements of the contract. You want to ensure that this contract is thorough and complete when it is signed. Failure to follow certain steps or best practices could result in an unenforceable contract. Therefore, great care should be taken when creating contract acceptance methods, including click-to-accept.
There are many ways to accept a contract, but each has its time and place. Ways to accept a contract include:
A wet signature is a traditional pen-to-paper action that validates the agreement. The receiving party has to accept the contract by printing it, signing it, and turning it back in. This might be via email, fax, or hand delivery. Wet signatures are effective but not so efficient, especially for online agreements or high-volume agreements that require no modification.
A traditional eSignature is contract acceptance facilitated by delivering or emailing the contract to the recipient. This usually occurs by use of a PDF and is signed by typing, drawing, or stamping a signature. The eSignature may be appropriate for customized agreements for one party but is not efficient when dealing with thousands or millions of agreements online.
Are click-to-accept contracts legally enforceable?
Yes, click-to-accept contracts are legally enforceable. Federal and state laws uphold the validity of electronic signatures as a method to accept a contract, including click-to-accept agreements. The Electronic Signatures in Global and National Commerce Act (ESIGN) was passed in 2000 and governs electronic signatures for interstate and foreign commerce. It states that an electronic signature is “any electronic sound, symbol, or process” that would be “logically associated” with the contract. Clicking to accept a contract can meet this definition.
The Uniform Electronic Transactions Act (UETA) is a state law adopted in 1999 by which 49 of the 50 states currently abide. It lays out specific requirements for electronic signatures to make them valid but provides that “click-through” agreements are valid electronic signatures. These protections help create enforceable click-to-accept agreements for your company.
How to decide whether a click-to-accept contract is the correct choice for your agreement
When deciding whether a click-to-accept contract is right for your agreement, consider the following questions:
- How many times will this contract get signed in a single year?
- Will the document be the same each time (standardized), or will the terms change frequently?
- What is the value of this individual agreement? Is it worth negotiation and redlining? Or is it a “take it or leave it” contract?
- Would your business benefit from allowing the contract to be signed online or in a mobile app?
- Will the volume of contracts be cost-prohibitive for other contract acceptance methods?
Answering these questions will help you decide if click-to-accept is the right way to go. If you decide the answer is yes, you’ll need to pick the right click-to-accept method for your agreement.
Types of click-to-accept agreements
There are multiple variations of click-to-accept contracts that may be useful for your purposes. Each has different benefits and may be best suited for particular uses within your company.
Sign-in-wrap agreements notify a user of the existence of a contract and advise the user that by clicking the button to sign in, they are agreeing to the terms. Sign-in-wraps do not require a user to affirmatively agree to a contract by clicking a separate button or checkbox. The enforcement of sign-in-wraps is less certain than other click-to-accept agreements, such as a clickwrap. Because a user is not required to affirmatively assent to the agreement through a separate action, many courts hold that sign-in-wraps do not provide proper notice or prove assent to the terms of the contract.
As sign-in-wraps use a “dual purpose” button, courts are more skeptical of this click-to-accept method. The button’s task is arguably more to sign in rather than to accept the contract, so this method is often limited in its enforceability. While it is more enforceable than browsewraps, it is no match for clickwrap agreements.
A clickwrap agreement is an online acceptance that users interact with by affirmatively checking a box or clicking a button that says “I agree.” This is a true click-to-accept contract because it requires an affirmative act specifically related to the contract. It serves no dual purpose like a sign-in-wrap, as it is only for the purpose of accepting the online agreement.
Clickwrap agreements are more prevalent in B2C business where companies sell products and services exclusively online. However, they are increasingly common in the B2B marketplace because of their ease of use and high rate of enforceability. Clickwrap agreements have maintained the highest success rate in court. In 2020, clickwrap agreements had a 70% success rate, compared to 64% for sign-in-wrap, and 14% for browsewrap agreements. This makes clickwrap agreements the best click-to-accept method for your business.
Creating an enforceable click-to-accept agreement
There are certain types of evidence a court will look for to accept a click-to-accept agreement. Courts will often look at factors like:
- Whether the user affirmatively assented to the contract through some action
- Whether the user had actual or inquiry notice of the contract terms
- The design and layout of the screen during the acceptance
- Whether the company that seeks to enforce the contract has appropriate records that the agreement was signed and when.
Many businesses fail to prove their clickwrap agreement, even when the user did assent to the terms. This can occur when their contract management technology cannot keep up with the fast pace and high volume of electronic contracts.
Back-end records are essential. They capture data at the time of contract acceptance including who signed, when they signed, and what version of the contract they signed. This evidence is essential to enforcing an agreement. By following clickwrap best practices, your business can greatly increase their enforceability and manage them more effectively.
An all-in-one solution for click-to-accept contracts
Ironclad’s contract lifecycle management platform gives you the tools necessary to create, modify, and enforce click-to-accept contracts. Clickwraps offer you an enforceable way to handle high-volume contracts that require little to no modification to accept. This can streamline your contract management processes and allow you to focus on revenue creation instead of tracking documents. This all-in-one solution gives you the tools needed to create enforceable contracts.
- What is a click-to-accept contract?
- Why is contract acceptance important?
- Are click-to-accept contracts legally enforceable?
- How to decide whether a click-to-accept contract is the correct choice for your agreement
- Types of click-to-accept agreements
- Creating an enforceable click-to-accept agreement
- An all-in-one solution for click-to-accept contracts
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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.