Given the prevalence of contracts formed over the internet every day (for example, every time someone buys goods from an e-commerce platform, or downloads an app), it might seem odd that questions are still asked about the enforceability of online contracts. At law, simple contracts can be formed over the internet in just the same way as any other contract or context. Unless special legal requirements apply (such as for guarantees or contracts for the sale of land), all you need is an offer, acceptance of that offer, the intention to create a binding relationship, and some kind of consideration.
One common way to do this, for example when selling something online, is to require the customer to click "I accept" to a standard set of terms before completing their purchase (this is called a "clickwrap" contract).
Although a court has never had to look at the question in New Zealand, overseas courts regularly uphold clickwrap contracts, so long as the basic ingredients of contract formation are present. However, where clickwrap contracts fall down is often around adequate notice of the terms of the contract. It's hard to argue that a buyer has accepted a standard set of terms (and indicated their intention to be bound by them) if they have not had a real opportunity to read and consider the terms before accepting. And if there is no proof that adequate notice has been given (and that the buyer in question has actually clicked the "I accept" button), then it can be very hard to enforce a clickwrap contract in court.
To stand you in good stead if you ever do need to take action, here are some easy suggestions to help strengthen the enforceability of your clickwrap contract:
- Show users your terms on-screen (rather than via a hyperlink). Make it easy to find your terms elsewhere on your website too (eg, link to them in your website footer).
- Make sure your terms are clear and easy to understand. Avoid legalese at all costs.
- If there are any unusual or onerous terms, make sure these are clear and up front (consider putting them in bold or right up the top of your terms). Make your terms balanced and fair (and make sure that they comply with mandatory consumer protection and privacy law).
- Make it so that users have to scroll down to the bottom of the terms before they can click "I accept".
- Give the user the option of accepting or not accepting the terms, and make sure that their selection is permanently recorded in a way that you can easily and reliably retrieve.
- If you change your terms, make sure that users re-accept your new terms before they buy from you (or use your services) again.