Many agreements can be delivered as a clickwrap agreement. However, some types of contracts benefit the most from clickwrap processing. Companies that are able to provide evidence proving the above are more likely to be applied. The types of evidence commonly used to enforce clickwrap (and sign-in wrap and browsewrap) agreements in court are: affidavits/statements, screenshots, and back-end acceptance records. Clickwrap contracts are the best way for companies to limit their risk without compromising conversion or customer experience. Companies add clickwrap agreements to login pages, payment processes, and login pages. They are perfect for all types of contracts and are perfect for improving the sales function and achieving the department`s goals. The nature of these agreements requires a higher level of control and security, so it is imperative that companies master not only how agreements are presented and accepted, but also how to demonstrate their acceptance. Since clickwrap contracts require users to accept a contract by checking a box or clicking a button, clickwrap is the most commonly applied type of online agreement. Unlike clickwrap agreements, login, encapsulation and browsewrap agreements are “accepted” when the user performs another action: log in, register, log in or simply use the website (browsewrap). The content and form of clickwrap agreements vary widely.
Most clickwrap contracts require the end user to express consent by clicking an OK or Accept button in a dialog box or pop-up window. A user displays a rejection by clicking Cancel or closing the window. In case of refusal, the user will not be able to use or purchase the product or service. Conventionally, such a take-it-or-leave-it contract is called a “membership contract, which is a contract that lacks bargaining power and forces one party to be favored over the other.” But are such agreements enforceable? In the United States, since the landmark case of ProCD v. Zeidenberg, courts have tended to apply “shrink packaging” agreements that accompany packaged computer software as long as (i) the terms of such agreements are “commercially reasonable” and are not otherwise unscrupulous or subject to any other defense available under contract law; and (ii) Buyers have the right to refuse these Terms upon opening the Product Packaging and receive a full refund. (For more information on ProCD v. Zeidenberg, see our July 1996 Intellectual Property Bulletin.) Not surprisingly, in a number of cases, including Groff v. America Online, the courts have applied similar reasoning in the application of “click” agreements. Clickwrap contracts are often deployed to fulfill some of a company`s most important agreements: from the terms of service hosted online on a website or app to extended employee agreements. A clickwrap can be embedded on your website, presented via a dedicated URL or delivered via SMS and instant messages. Standardized contracts usually have the same language from person to person and can be accepted repeatedly to a large extent by many signatories, if not an infinite one. Think of agreements like non-disclosure agreements or terms and conditions that, by and large, apply to whoever the signatory is.
The clickwrap method was adopted by the Tribunal in ProCD/Zeidenberg, 86 F.3d 1447 (Cir. 7, 1996), in which Zeidenberg acquired a CD-ROM produced by ProCD containing a compilation of a database of telephone directories. After purchasing this CD-ROM, Zeidenberg installed the software on his computer and then created a website that offered visitors the information contained on the CD-ROM at a lower price than ProCD charged for the software. Prior to purchasing the Software, Zeidenberg may not have been aware of any prohibited use or distribution of the Product without ProCD`s consent. However, as he was preparing to install the software on his computer, the software license appeared on his computer screen and did not allow him to proceed with the installation without signaling his acceptance by clicking on his consent in a dialog box. The court ruled that Zeidenberg accepted the offer and the terms contained in the license by clicking on the dialog box. Zeidenberg was given the opportunity to read the license terms before clicking on the acceptance box. The court also found that Zeidenberg could have rejected the terms of the contract and returned the software. (Id.). [5] [6] Potential problems arise when a company and not an individual enter into a click-through agreement. In this situation, the seller must ensure that the person who clicks on the acceptance has the authority to accept on behalf of the company. Of particular concern is the ability of an employee to bind his or her employer to non-compete obligations and other contractual provisions relating to goods and services other than the software product, which is then downloaded, installed or used by that employee.
Custom contracts are agreements that are usually processed to a lesser extent because they are tailored to specific signatories and are not intended to be reused without being tailored to a single new signatory. These are agreements such as mergers and acquisitions activities, long-term partnership agreements, etc. From the perspective of user experience, workflow activation, and overall efficiency, clickwrap agreements are better than traditional e-signatures. Clickwrap contracts give you more flexibility in contract presentation and automated adoption tracking, and enable self-service workflows. We think of contracts signed through clickwrap agreements or electronic signatures in two ways: standardized and personalized contracts. Compared to connection encapsulation and navigation, clickwrap agreements have maintained the highest success rate in court. In 2020, clickwrap agreements had a 70% success rate, compared to 64% for the connection wrap and 14% for browsewrap agreements. The success rates of all three have declined over the years as the courts have become more nuanced in their assessment of these agreements and in the evidence needed to enforce them. Explicit consent is much easier to prove in court, and explicit consent is what you get when you use clickwrap via browsewrap. Typically, clickwrap`s most tangible return on investment can be seen in standardized contracts. Standardized contracts are ripe for automation, can be hosted and shared online as they do not need to be reviewed or modified individually before being adopted.
Companies implement clickwrap agreements as part of other workflows such as customer onboarding, e-commerce payment, partner onboarding, and more. Clickwrap contracts are a digital offshoot of shrink film licenses. In the last century, when most software was installed locally, software vendors often used shrink film licenses to protect their intellectual property. When the customer removed the plastic shrink film that protected a new software disc or compact disc, he contractually declared that he accepted the terms of use of the software manufacturer. In a clickwrap contract, to use a website or download content, the user must check a box indicating that he has read and accepted the terms and conditions applicable to the website or software. Sometimes agreements are many pages long and difficult to read. They typically contain two things: Clickwrap agreements provide convenience to businesses in several ways: In terms of legal applicability, clickwrap agreements provide an additional layer of authenticity with the data points and audit trail collected throughout the adoption process. Get Ironclad`s Clickwrap Litigation Trends 2021 report to learn more about case law and influence on clickwrap agreement best practices.
Typically, you`ll see Clickwrap agreements when you: Clickwrap litigation has been running for different types of businesses since 2002. Previous clickwrap cases have defined the landscape of clickwrap agreements and how courts evaluate them today. .