CYA by Avoiding These Top Three Clickwrap Mistakes
Among the different kinds of online agreements, clickwrap enjoys wider adoption in the business world and higher enforceability in court. Ironclad’s Clickwrap Litigation Trends Report shows that in 2021, 63% of all online agreements were clickwrap agreements, and they were enforceable 75% of the time. Given their high success rate, you may wonder why clickwraps sometimes fail to hold up in court.
Many of your organization’s vital online agreements that protect you from liability, such as your Terms and Conditions, are clickwrap agreements. If you can’t enforce them because of technical defects, your business is exposed to risk.
Following clickwrap best practices gives your clickwrap agreements the best chance of being enforced. Proper management of your clickwraps starts with designing them to be conspicuous to users. It continues with how you lead users to assent to the contract and collect backend records of each user’s acceptance.
Why do some clickwrap agreements fail?
Some online agreements fail because businesses are making one or more clickwrap mistakes in their contract management. The most common reasons the courts declined to enforce clickwrap agreements are:
- Poor screen design
- Poor version control
- Lack of evidence
We’ll look at each of these three points in detail to see how you can avoid making similar clickwrap mistakes.
Poor screen design
If the page layout is designed such that users may be unaware that a particular action on their part served as consent to an agreement, it could render your clickwraps unenforceable.
The color of the hyperlink may make it unrecognizable as a hyperlink. The most commonly accepted color and style for hyperlinks is blue and underlined. You’re safer staying with this format. The hyperlink must also contrast strongly with the background so any user can be said to have had constructive notice of the agreement’s existence.
In Colgate v. Juul Labs Inc, the defendant couldn’t enforce its Terms and Conditions because the hyperlink that led to the agreement was inconspicuous. It was not a different color and was not italicized or underlined to make it stand out.
Unclear presentation of the agreement
The agreement should be clear and easy to read on any device. Presenting your clickwrap agreement in a tiny font that makes it challenging to read increases the possibility of it being deemed unenforceable.
Critical provisions in your agreement that substantially affect users’ rights, like an arbitration clause, should be highlighted. Burying key provisions in your agreement is bad practice, meaning the courts may be disinclined to enforce them.
You should also design your clickwraps to allow every user to view them before giving their assent. Even if they don’t read it, they cannot say there was a lack of notice. There are many ways to do this:
- By presenting the contract directly inside a scroll box that displays on every user’s screen
- By giving users a direct link to the agreement
- By mandating everyone to scroll through the agreement before they can click on the button
Lack of proximity
It’s poor design if the components of clickwrap agreements are far away from each other such that a user may be unaware that they are connected. You should place the agreement language, hyperlink, and acceptance box close to each other so that users know they relate. The user should know that clicking the box means that they’re assenting to the agreement the hyperlink leads to.
Pre-checking the acceptance box
Some businesses pre-check the acceptance box for their users. This is not only bad practice but is also banned in some jurisdictions. Best practice allows users to tick the box themselves. This way, you can prove that there was an affirmative action that the user took to consent to the contract.
Poor version control
Many organizations pay close attention to designing the screen of their clickwraps for optimal enforceability and collecting backend records. However, they often pay little or no attention to contract versioning.
Version control refers to maintaining backend records that show the particular version of the agreement each user agreed to. It also includes collecting assent to your modified terms.
It’s not enough to show that users accepted your original contract. You must also show that they gave their consent to all the changes you may have made to the agreement.
Practices that amount to poor version control contribute to clickwrap failure.
Changing agreement terms unilaterally
You should always get users’ consent each time you modify the terms of your clickwrap agreement. A clickwrap agreement is a contract, and there must be a valid acceptance before you can enforce it against a contracting party.
Failing to keep records of contract versions
Proper version control also requires that you keep records of the screen layout and the terms of the agreement at each consent point, as well as the changes you make over time.
In Snow v. Eventbrite, Inc., the defendant couldn’t provide the screen or the version of the agreement the plaintiff would have seen when they signed in to the website. Eventbrite instead offered a screenshot of the current screen and versions of the agreement at different times. The court refused to enforce the agreement.
Subsequently, in 2021, Eventbrite was able to locate and present a screenshot of the screen the users would have seen and the contract version at that time. The court, therefore, enforced their agreement.
Failing to maintain an audit trail of each user’s original assent to your agreement and their agreement to any modification you make is poor version control and can make your clickwraps unenforceable.
Lack of evidence
Clickwrap agreements are not electronic versions of Word or PDF documents you can simply print out as evidence. They are digital native or HTML contracts built into the website, so proving their acceptance is a whole new ball game.
When a user claims that they didn’t assent to your clickwrap agreement, how do you prove they did? Some organizations are yet to figure out what it takes to prove that a user validly gave their assent to a clickwrap agreement. Some wrongly assume that because users can’t proceed on their website without clicking “I agree,” it’s enough evidence. However, judicial decisions fault that line of reasoning.
In Nager v. Tesla Motors Inc., the court refused to enforce the defendant’s agreement to arbitrate because they couldn’t provide particular evidence that showed the plaintiff had consented to it. Tesla provided evidence that detailed how customers make purchases on their website, including that they must click on the “I accept” and “I submit” buttons. The court stated that the “Defendant has not offered any business record that establishes plaintiffs clicked through and electronically accepted the Agreement.”
Similarly, in Melvin v. Big Data Arts LLC, the court declined to enforce the defendant’s agreement because of a lack of evidence to prove the plaintiff’s manifest assent.
How do you ensure your clickwraps don’t fail due to a lack of evidence? By collecting backend records that show the following:
- The individual user that accepted the contract and information that identifies them
- The contract version that was accepted
- The date and time of the acceptance
- The operating system and browser the user was using when they accepted the contract
- Details on how the contract was shown to the user at the time of signing
- Whether the user viewed the contract
- Screenshots that show what the screen looked like when the user accepted the contract
- Screenshots that show how the user was led to accept the agreement
- Information about the period each contract version was active
- Information that shows the differences between the contract versions
- Backend records that demonstrate individualized data indicating a specific user’s activities on the website
Using contract management software to manage clickwraps
Given the potential pitfalls associated with online agreements, clickwrap software can help you launch contracts with confidence. The right platform will help make your clickwrap agreements enforceable by presenting them appropriately, maintaining contract versioning, and keeping backend records that show each user’s assent.
You can present your agreements without friction, provide a great user experience, and maximize conversion with clickwrap agreements. Avoiding these three top clickwrap mistakes will give your online agreements a strong chance of holding up in court.