You’ve probably come across a clickwrap agreement without even realising it. Some people call this the click-through contracting model. It is a quick method for users and consumers to agree to the terms of service providers. Technology has made buying goods and services online a lot simpler.

All you have to do is read the terms and click “I agree.”

They make the contracting process more seamless by eliminating the need for negotiation. With that click, you consent and get access to the product or service you’re looking for. But, in all their simplicity, are clickwrap agreements legally enforceable? We’ve provided some insights below.

What are clickwrap agreements?

A clickwrap agreement is an online agreement in which you accept the terms by clicking a button or checking a checkbox. This method makes your acceptance clear and active rather than assuming it. The agreement itself is no different from any other contract; clickwrap simply refers to how you show your acceptance.

In practice, you will usually see a button that says “I agree” or “I accept”. Sometimes the terms are shown on the screen, and other times they are linked for you to read before clicking. By clicking, you confirm both that you know the terms exist and that you agree to be bound by them.

Click-through contracting is widely used by businesses that offer online products or services. Common examples include:

  • Software providers that require you to agree to licence terms before installing or using their programmes.
  • E-commerce platforms that ask you to accept their terms and conditions before completing a purchase.
  • Social media and online service providers require you to agree to community guidelines or user agreements before creating an account.
  • Mobile apps that present an App EULA during download or first use.

Are clickwrap agreements legally enforceable?

The short answer is yes

Clickwrap agreements can be just as enforceable as traditional contracts signed with wet ink or electronic signatures. The key is that the agreement meets the basic requirements for a valid contract. The Electronic Communications and Transactions Act (ECTA) confirms that electronic agreements are legally valid. By clicking “I agree”, your acknowledgement and acceptance of the terms can be inferred from your positive act of clicking. That action is treated as acceptance, even if you did not read the terms.

However, enforceability depends on how the vendor presents the terms. Users are often shown a link to the terms and conditions next to the box they must tick. The law deems the user to have read those terms, provided certain requirements are met. ECTA requires that the terms be reasonably noticeable, accessible, and capable of being stored or retrieved. A small, hidden hyperlink will not be sufficient. But if the terms are clearly linked next to the acceptance box, a reasonable person would be expected to notice them. In that case, the law will usually deem the user to have agreed to the terms.

When it comes to electronic processes like clickwrap agreements, you need to look at how different laws interact and make sure that you comply with them.

Although our courts haven’t seen many matters involving click-through agreements, ECTA affords them recognition and provides guidelines which help to determine their enforceability.

Why use a clickwrap agreement?

Clickwrap agreements are quicker and cheaper than negotiated agreements. They let you finalise agreements with a single click, speeding up sales and reducing legal fees. They’re also a good way to keep encrypted digital records of acceptance, which can be relied on later if a dispute arises. Contracts are signed faster with less negotiation.

You save time and reduce legal fees.

With clickwrap agreements, you dictate terms more often than negotiate them with every customer, which means you contract on better terms. All customers will be on the same terms, making relationships easier to manage. The business can focus more on selling and less on contracting. Less time should be devoted to managing templates and contracts.

Click-through contracting also scales well; whether you’re dealing with 10 or 10,000 customers, the process stays simple. They help with compliance, too, as you can prove that terms were presented clearly and that users actively accepted them. This reduces risk while keeping the contracting process efficient.

What types of goods or services?

Click-through contracting isn’t just for downloading and installing software programmes; it’s also for other kinds of agreements. Examples of transactions that often involve clickwrap agreements include streaming services for music and movies, purchasing airline tickets or online music, and registering for social media accounts. It is also useful for SaaS offerings, portals, platforms, online stores or other one-to-many offerings.

It is also good for low-value, high-volume business models.

What to keep in mind when creating a clickwrap agreement

  • Create agreements in plain legal language so the terms are easy to understand.
  • Ensure the terms are reasonably noticeable, accessible, and able to be stored or retrieved by linking them next to the “I accept” button.
  • Make sure you create accessible, mobile-friendly agreements.
  • Maintain a detailed audit trail for each user.
  • Create a method to notify users and recapture consent when updating terms.

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