Clickwrap Contracts vs. Traditional Contracts
In this digital age, click-wrap contracts have become increasingly prevalent. You've likely encountered them when installing software, signing up for online services, or even making online purchases.
But are click-wrap contracts as enforceable as a signed contract? I have the answer below.
What is a Click-Wrap Contract?
Click-wrap contracts are essentially short agreements presented to users who must click an "I agree" or similar button before proceeding. These contracts govern the legal relationship between the user and the company or platform providing the service. Usually, online programs require you to read the agreement before signing and clicking the “I agree” button.
The enforceability of click-wrap contracts has been the subject of legal scrutiny in the past. However, over recent years Courts have generally recognized their validity, but there are a few key factors to consider to ensure their enforceability:
- Notice: The click-wrap contract must be visible and accessible to the user. Typically, they are presented in a scrollable box or a separate conspicuously linked page that requires the client’s acknowledgment.
- Consent: Clients must actively consent to the terms in the agreement by clicking an "I agree" or similar button. Passive acceptance, such as pre-checked boxes, are not sufficient to establish a binding agreement.
- Unambiguous language: The terms of the click-wrap contract should be clear and understandable to an average user. Complex legalese or hidden provisions may undermine the enforceability of the agreement.
Overall, click-wrap contracts can be enforceable if they meet these requirements, allowing businesses to establish and protect their legal rights while providing users with essential information about their services.
Versus Full-Length, Signed Contracts
While click-wrap contracts have gained prominence, contracts that contain signatures continue to be an integral part of the legal landscape. These are the contracts we encounter in everyday life, such as lease agreements, employment contracts, service contracts, and purchase agreements. Signed contracts offer a piece of mind that there is no question what the clients have signed onto regarding the contract because it has their signature on it and the date on which it was signed.
For contracts with services where there are no refunds offered or cancellations, the booking fee is smaller, and the client is signing up for the service online through an automated system (...think here a photography mini-session), a click-wrap contract may make sense because there is less risk involved. However here at TLP we are huge advocates of getting a client signature attached to most contracts so that you can show a court you gave them the contract to read and they voluntarily and knowingly agreed to it.
Whether you're navigating the world of click-wrap contracts or traditional contracts, understanding their legalities is vital. Click-wrap contracts have become an integral part of online transactions, while traditional contracts continue to shape our offline or email agreements. By following the principles of notice, consent, and clarity, click-wrap contracts can be enforceable, protecting both businesses and users. Although click-wrap agreements are great for some situations, TLP highly suggests using full-length, written contracts in most instances.
Part of ensuring that your business is prepared for any possible scenario involves taking steps to get legally legit now. One way to do this is by having a service contract between you and your clients.
If you're interested in learning more about which type of contract would work best for your specific situation, why not take this quiz? Your future self will thank you.
THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. EVERY SITUATION IS DIFFERENT & IS FACT-SPECIFIC. A proper legal analysis is necessary based on your location and contract. Consult an attorney in your home state for advice regarding your contract or specific legal situation.
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