Introduction: Businesses are increasingly defending their clickwrap agreements in court
Like traditional paper contracts, online agreements are subject to the fundamental principles of contract law. In either context, there must be a mutual manifestation of assent to form a contract. With respect to online contracts, courts have routinely recognized that an electronic click of a button or checkbox can sufficiently indicate the acceptance of an agreement. However, the language and layout of the webpage must give the consumer reasonable notice that the click of a button or checkbox will indicate acceptance of the contract.
There are three main ways of forming online contracts, each of which utilizes a different way of manifesting assent:
- Clickwrap Agreements: The user signifies his acceptance of the contract by clicking a button or checking a box that states, “I agree” (or similar language) after being presented with an agreement.
- Sign-in-wrap Agreements: The user is notified of the existence of the contract and is advised that by signing up (or a similar action), the user is agreeing to the contract.
- Browsewrap Agreements: The user is notified of the existence of the contract by a link located somewhere on the screen, but the user is not explicitly required to signify assent.
PactSafe conducted a study of clickwrap litigation trends. In our study, we found that clickwrap litigation has skyrocketed since it first appeared in the courts in 2002, increasing 626% between 2002 and 2018. The rise in litigation reflects the increase in business to business (B2B) and business to consumer (B2C) internet companies having to defend the enforceability of their Terms of Service and other online agreement terms.
Though each court tends to take its own approach when deciding this sort of issue, PactSafe’s study indicates that these types of companies have the best shot of successfully defending their online agreement terms if they are able to provide the court with screenshots, affidavits or declarations, and back-end records indicating the date and time of contract acceptance. This combination of evidentiary support best shows the court that the contract was accepted.
In this white paper, you will learn
- The clickwrap litigation trends from 2002 to 2018.
- The 3 different ways of forming online contracts and the validity of each type.
- The factors that influence the court’s decision as to the validity of an online agreement.
- The types of evidence a business should be prepared to show the court if trying to establish the validity of an online contract.