How are Clickwrap Agreements Proven?

The pandemic has caused our world to become increasingly digitized. From working at home to signing contracts online, many aspects of our lives are done entirely through online portals, which was unimaginable just a decade ago. In recent years, clickwrap agreements have become particularly important. Flexible, powerful, and intuitive, clickwrap agreements have started replacing traditional digital contracts en masse. Instead of requiring users to place or physically sign their signature on a Word or PDF contract, clickwrap agreements enable users to indicate assent by clicking a button or checking a box to say “I agree.”

Many organizations have adopted clickwrap solutions since clickwrap streamlines the contract acceptance and execution process. However, this large-scale adoption of clickwrap has also led to a proliferation of clickwrap best practices violations. According to Ironclad’s 2021 Clickwrap Litigation Report, 43% of companies failed to enforce their contracts because their screens didn’t give users adequate notice of the terms. In a similar vein, the overall success rate for organizations enforcing contracts in court has fallen to 60% in 2021 compared to 70% in 2019. 

Success rates have also fallen because courts have demanded more robust evidence of valid consent through clickwrap. As such, it’s become increasingly important for companies to provide thorough, clear evidence that users have given actual consent through screenshots, back-end records, and affidavits or declarations.

Read on to learn more about how courts assess clickwrap agreements and what kinds of evidence to enforce online agreements are required.

Clickwrap agreements can take the friction out of the contract management process when properly maintained and implemented. However, if you don’t know how courts assess clickwrap agreements or how to provide evidence to enforce online agreements, your clickwrap contracts are unlikely to be enforced in court.

Here are the elements that courts look for when assessing the enforceability of your clickwrap agreements:

1) Whether you’re using clear design elements to attract users to the clickwrap agreement

First of all, courts look at whether you’ve used clear design elements to give users adequate notice of your agreement terms. Courts like it when you display and show prominent links to your terms and conditions. 

For example, in Zaltz v. JDate, the court found that JDate users had shown assent to JDate’s terms when they checked a box next to a statement that confirmed they had read and agreed to the Terms and Conditions of Service. The court also liked how JDate had placed a hyperlink to their Terms and Conditions on the words “Terms and Conditions of Service” so that JDate users could click on those words to read the terms they were agreeing to.

On the other hand, if you don’t give customers an obvious opportunity to show that they know that there’s an agreement they need to give consent to, courts will be unlikely to enforce your clickwrap agreement. For instance, in Applebaum v. Lyft, the court deemed Lyft’s clickwrap agreement unenforceable because it failed to give users sufficient notice of the contract. While Lyft had provided a hyperlink to their terms and conditions, the hyperlinked terms were light blue on a white background and in a small, hard-to-read font. Since the words were hard to make out compared to the rest of the webpage, Lyft’s clickwrap was considered invalid.

2) Whether you’ve given users an explicit way to express affirmative consent to the terms of your contract

As a general rule of thumb, courts uphold clickwrap contracts because they require users to give affirmative assent to the terms of a contract by clicking a checkbox or button.

If you don’t give users the ability to show their consent by clicking a checkbox or button, courts are unlikely to consider your clickwrap agreement enforceable. This is because there’s no way of knowing whether the user has truly agreed to the terms of your contract, even if you’ve included a conspicuous link to your terms during the registration process. As such, browsewrap agreements—which automatically assume that users have accepted a contract if they use a website or app—are generally unenforceable in court.

3) Whether you have detailed back-end documents to provide evidence of user consent

Finally, courts look at whether you have detailed back-end documents to provide evidence of user consent. Like other digital contracts, clickwrap agreements are only enforceable in court if you have evidence that users actually agreed to your contracts. 

As such, just having a clickwrap process that uses clear design elements and gives users a checkbox or button to indicate assent isn’t enough. You need to create and maintain complete audit trails of user records that show who agreed to your terms and when. 

Let’s look at the types of evidence you need for your clickwrap agreements to be enforceable in court.

Courts look at three types of evidence when determining the enforceability of your clickwrap agreements:

Screenshots

Screenshots are images that display what the screen looked like when the contract was shown to and accepted by the user. Case evidence has shown that courts typically rule in favor of a company if it can provide screenshots that show: 

• How it used clear screen design elements to present the terms of their agreement clearly to the user
• How it gave the user a checkbox or button to show affirmative assent.

For example, in Epps-Stowers v. Uber Technologies, Uber’s screenshots showed what users could see when creating an Uber account. The court ruled in favor of Uber because the screen was designed to show the user they had to agree to a contract before registering an account. 

Back-end records

Back-end records refer to data that shows how a user agreed to your contract, when they agreed to it, and other key data points that prove a certain user accepted the contract. These records are more likely to be accepted as evidence in court if they prove a specific user signed a certain agreement and can give specific details that connect that user to a specific version of the contract.

For instance, in Tanis v. Southwest, Southwest Airlines’ contract was enforceable in court because it provided detailed back-end records. When the employee checked off the box, Southwest Airlines’ clickwrap solution had automatically generated an electronic record that showed the following key data:

• The employee’s name
• The employee’s ID
• The exact date and time the employee affirmed consent to the terms of the contract

If a company cannot provide back-end records with such detailed information, the court will probably decline to enforce its clickwrap contract. In Nager v. Tesla, the court refused to enforce Tesla’s terms because Tesla could only produce “just some random document” that was not connected to the transaction or customer.

Affidavits or declarations

Affidavits or declarations are sworn statements given by your team about your company’s contract acceptance methods. They are more likely to succeed in court if they provide a lot of detail about your clickwrap process, and the staff member giving the affidavit is in a role that gives them pertinent details about the clickwrap process.

In Kourembanas v. InterCoast Colleges, InterCoast’s arbitration agreement was deemed enforceable because InterCoast could produce a declaration by the Vice President of Compliance and Academics. Since this staff member had “working knowledge” of the records and standard procedures of student enrollment, their declaration was deemed to prove the valid existence of the agreement.

If the key staff member doesn’t have detailed or intimate knowledge of the clickwrap process, the court is less likely to enforce the agreement. For instance, in Beattie v. TTEC Healthcare Solutions, the court refused to enforce TTEC’s terms since the staff member wasn’t directly involved in their contract acceptance process.

Creating an enforceable clickwrap mechanism is easier said than done. Not only do you need to include clear design elements to guide users towards your contracts, but you also need to give users an explicit way to express affirmative consent through a button or checkbox. You also need to have a detailed audit trail of screenshots, back-end records, and affidavits or declarations to prove that you’ve done all of these things and that users actually assented to your terms and conditions.

We understand that this can take a lot of time. Fortunately, we at Ironclad are here to help. Our full-suite clickwrap tool empowers you to create frictionless user experiences that meet the court’s requirements. We also provide you with screenshots and thorough back-end documents so all of your clickwrap agreements will be enforceable in court. You won’t have to worry about getting affidavits or declarations from key staff members since you’ll already have more than enough evidence to enforce online agreements.

Interested in trying out our clickwrap tool? Get a clickwrap demo today.