More and more businesses are establishing online stores and forums, and are otherwise seeking to engage with their customers on-line. On-line activity has legal consequences, so businesses should take the time to review their website, on-line ordering and other terms and conditions.

In the context of on-line transactions, the crucial question is whether your website terms and conditions are enforceable. Merely placing terms and conditions on a website does not automatically mean that all users will be bound by them: An additional step must occur whereby the user agrees to comply with the terms, and a legal agreement is formed. Broadly speaking, there are two common methods of achieving this, being:

  • “click-wrap” systems, where the user must scroll through the terms and conditions before agreeing to them; and
  • “browse-wrap” systems, where the user is referred to terms and conditions by way of a hyperlink link, but is not forced to click on the link before agreeing to the terms.

There is limited case law and guidance in the area of "click and accept" website terms and conditions. However, as a general principal, the website operator must provide "reasonable notice" of the existence of terms and conditions before the user accepts (or is deemed to have accepted) them.

Both the “click wrap” and “browse wrap” styles are acceptable, and are suitable in different circumstances. Generally, and indeed historically, the “click wrap” procedure has been preferred, as the process requires that the user reads (or at least scrolls through) the terms and conditions before proceeding. This may result in the terms and conditions being more easily enforced by the website operator.

In any event, to maximise a website operator’s ability to enforce and rely upon terms and conditions:

  • the user should be required to accept the terms before using the website, or performing the relevant act (e.g. establishing the user account, making the online purchase etc);
  • the terms and conditions must be conspicuous and easily read and accessed (e.g. the font size must be reasonable);
  • users should be able to print the terms and conditions if they wish to do so; and
  • the website should make it clear that by clicking on the "I accept" box, that the user is accepting and will be bound by, the terms and conditions. For example, the website could state that, "By ticking the "I accept" box, you agree to, and will be bound by, the terms and conditions. If you do not agree to the terms and conditions, you must not use, access, purchase or download materials from the website or obtain a user account."

Website operators should also regularly review the content of their terms and conditions, in order to ensure that they are accurate, comprehensive, comply with current law, and address all the risks associated with the current functions of the website.

Of course on-line contracts will probably never have the benefit of the presumption that a person is deemed to have read and understood any contract they have signed. And there is usually little scope for someone to argue that was not their action if they have signed the document in the presence of a witness. Hence for major business contracts there are still significant benefits in having customers sign a written agreement.