In the realm of cyber laws, “clickwrap” is a term that evolved from “shrink wrap agreement,” which is the purchase agreement that is bound with a product by plastic wrap, and the agreement is made when the consumer opens the shrink wrap.
In a clickwrap agreement, or ”click-through agreement,” the user is typically faced with a dialog box or pop-up web page that requires the user to put a checkmark in the small box next to the words “I Agree” before they are able to use the product or service. So, in effect, it requires the user to agree to a website or software provider’s terms and conditions before the user can access the website or service.
A user indicates that they do not agree by clicking “cancel” or simply closing the window. If the user does elect to reject the terms, they are unable to use or purchase the product or service. In the law, these take-it-or-leave-it contracts are referred to as ‘contracts of adhesion.” A contract of adhesion is a contract that does not allow one of the parties to have any bargaining power. Rather, it forces one party to be favored over the other.
In a clickwrap agreement, the service or product provider offers the agreement on a take-it or leave-it basis. The consumer does not have the opportunity at all to negotiate the terms and conditions of the agreement.
Another similar type of agreement is an end-user license agreement (EULA). An EULA accompanies most software for sale that is either delivered in shrink-wrap packaging or sold over the Internet. An EULA serves as a software license as well as a contract between the producer and user to specify the limits of use granted by the owner to the user.
Clickwrap agreements are common in signup processes for social media services like Facebook or Tumblr, connections to wireless networks operated in corporate spaces, as part of the installation process for many software packages, and in other circumstances where the provider of a service or product seeks a consumer’s agreement through digital media.
What Do End User License Agreements (EULAs) Cover?
EULAs may include any of the following terms:
- Licenses to use software;
- Rights of use;
- Fees and payments;
- Forum clauses;
- Warranties;
- Limitations of the liability of the service or product provider that would apply in situations such as viruses, failure of the site to operate, or third-party links.
There may be other terms and conditions as well.
Are Click Wrap Agreements Enforceable?
Based on current law, clickwrap agreements or EULAs are legally binding if the user:
- Was forced to view the agreement, which includes any policies regarding warranty, shipping, and complaints or returns;
- Had to take some affirmative action to agree;
- Had to be truthful in the information they disclosed;
- Was prevented from proceeding if they did not agree;
- Had the option to return the product or to stop using it and receive a full refund.
In addition, the agreement has to be truthful in the information it contains.
Usually, retailers do not allow opened software to be returned for a refund, citing copyright issues. However, many companies are now accepting returns of opened software, and EULAs are provided on websites for consumers to read before committing to purchase software.
An electronic acceptance method such as electronic signature examples or clickwrap agreements makes an agreement every bit as enforceable as a paper agreement with a signature made by a pen. However, there are additional standard elements that must meet certain requirements of contract law.
In order to be enforceable in a court of law, a clickwrap agreement must include the following:
- Terms and conditions that are accessible to the user and easily retained by them;
- Offers transparency for any terms that are unusual;
- Requires the user to take Affirmative action to indicate acceptance or agreement, e.g., ticking a box;
- Comprehensive records must be stored which show the contract, information about the customer, and the date and time of user site access;
- The person who indicates their agreement must be given notice of the agreement, they must consent to the terms, and the agreement must be fair.
To summarize, a clickwrap agreement must encompass three key factors: notice, consent, and fairness. If it offers these features, it may be enforceable in a court of law.
Clickwrap agreements are commonly used in software licensing. In this case, a user must agree to the terms and conditions presented in a clickwrap agreement before they are able to download software onto their own computer and proceed to use it. Other examples include registering a social media account, non-disclosure agreements, policies for the use of cookies on a website, data processing agreements, and statements of work (SOWs).
An SOW functions as both a contract and a project management tool. It usually requires a clickwrap agreement as proof that the work was agreed upon by all of the parties involved.
Courts have generally enforced clickwrap agreements when users have challenged them. There are not many reported cases, but in the few that report challenges to their validity, the courts have upheld the terms of the click wrap agreement.
Some legal cases involving clickwrap agreements include a case in which a person bought advertising from Google’s Adwords. The user claimed he was a victim of “click fraud,” which resulted in his having to pay an increased cost for advertising.
The court that heard the case upheld the clickwrap agreement. The court was of the opinion that the user had had reasonable notice of the terms and conditions of the agreement and clearly consented to them.
How Can a Consumer Withdraw From a Click Wrap Agreement?
It is possible to withdraw from a clickwrap agreement. However, to do this, the consumer must prove procedural unconscionability.
Procedural unconscionability means that the parties involved in a contract did not freely consent to its terms and conditions. For example, if a consumer can prove that duress, illegality, or coercion was involved in the making of the agreement, this can constitute procedural unconscionability.
Proving procedural unconscionability allows the court to either void, modify, or invalidate certain terms or provisions of the contract to render it unenforceable. It is difficult to see how duress, illegality, or coercion might arise in connection with a clickwrap agreement, but it should be under some very unusual set of circumstances. It would be grounds for convincing a court that the person who agreed to it may withdraw.
Breach of a Click Wrap Contract
Because of the nature of the Internet, business has increasingly become global in scope. Therefore, it is likely that products and services are being traded on an international scale. In the event that a contract dispute arises, the agreement’s terms come into play and can affect the consumer’s rights.
When reading the clickwrap license agreement, a user should review what it says about the remedies for breach of contract since the law that may apply may be determined by a choice imposed by the agreement. In the event a claim arises, a contract lawyer can advise you of your rights and the best course of action for seeking a legal remedy.
Should I Need the Help of a Lawyer for My Click-Wrap Issue?
If you agree to a clickwrap agreement and are having a problem or dispute about it, you want to consult a business lawyer.
LegalMatch.com can quickly connect you to a lawyer who can review the clickwrap agreement at issue in your situation and advise you of what your rights are. In the event you have a claim, your lawyer can advise you of the best course of action for seeking a legal remedy.
