Technology has made buying goods and services online a lot simpler. 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 show service providers that they agree to terms and conditions.

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

They make the contracting process more seamless because there’s no room 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.

Are clickwrap agreements legally enforceable?

The short answer is, yes, clickwrap agreements can be just as enforceable in most jurisdictions as the traditional model, which typically uses wet ink and electronic signatures. As long as they are legally valid and binding contracts. For example, the Electronic Communications and Transactions Act (ECT Act) provides some legal certainty as to the status of clickwrap agreements. For example, if you click on the “I agree” button, your acknowledgment of and agreement to those terms can be inferred from the circumstances. Regardless of whether you have read them or not.

Even though terms and conditions aren’t prominent on the website, the ECT Act says they can still be legally enforceable. Often, there is a link to terms and conditions next to the box the customer or user must tick. The user is deemed to have read these terms even if they haven’t, subject to certain requirements being met. The requirements set an objective test to decide whether the notice is clear enough for a reasonable person to notice. The terms must be accessible so that a person can read, store or retrieve them. A hyperlink that is small and hidden in an unexpected corner of the website’s page will, for example, not meet these requirements. 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.

Why use a clickwrap agreement?

Clickwrap agreements are quicker than agreements that need to be negotiated. They’re also a good method of keeping encrypted digital records. Contracts are signed faster with less negotiation.

You reduce legal fees.

You dictate terms more often than taking them, which means you contract on better terms. All customers will be on the same terms, which makes the relationships easier to manage. The business can focus more on selling and less on contracting. Less time needs to be devoted to managing templates and contract management.

What types of goods or services?

They aren’t just for downloading and installing software programs but for other kinds of agreements, too. Some examples of transactions that typically use a clickwrap agreement are using streaming services for music and movies, buying an airline ticket or online music, and registering an account on social media.

What to keep in mind when creating a clickwrap agreement

  • create agreements that use plain legal language so that the terms are easy to understand;
  • make sure you create accessible, mobile-friendly agreements;
  • maintain a detailed audit trail for each user; and
  • create a method to notify users and recapture consent when updating terms.

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

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