A clickwrap contract is a popular type of a digital contract. It is an agreement which is between a user and a company. A user must click a box or button before they download content, make a purchase, or use a website.
A clickwrap (also known as click-accept, click-to-sign, or clickthrough) agreement is an online agreement that users agree to by clicking a button or checking a box that says “I agree.” The act of signing via an electronic signature is replaced with the act of clicking. Related agreement types include sign-in-wraps (where clicking “register” or “sign-in” constitutes acceptance to the terms) or browsewraps (where using the site indicates acceptance of terms).
Clickwrap agreements are the best way for businesses to limit their risk without impacting conversion or customer experience. Companies add clickwrap agreements to sign up pages, checkout flows, and login pages.
Contract acceptance is an important stage in the contract management process. What makes clickwrap agreements different from an eSignature option is the electronic “signature” (that barely legible, squiggly line you draw with your mouse or finger) that is placed on a document to memorialize your signature. A clickwrap agreement eSignature is a collection of key data points that comprise an audit trail, confirming that a user “actively assented” to an agreement through an action, such as clicking a button.
Salient features of Clickwrap Contracts-
1. Clickwrap Contracts are unilateral Contracts. They contain standard terms and conditions which multiple users online agree on before using the websites or products.
2. Unique identification of Clickwrap Contract are buttons like:
I accept
I agree
Ok
I consent
3. Clickwrap Contracts usually relate to terms and conditions, usage, privacy related terms, or End-user license Contracts (EULS).
4. Users can opt-out of the contract by clicking on the cancel button, I disagree, or by closing the sites.
Types of evidence needed to enforce clickwrap agreements-
The courts often determine whether the agreements are enforceable by judging:
*Whether or not the user explicitly accepted the contract
*Whether the user had actual or inquiry notice of the terms
*The design and layout of the screen containing the clickwrap agreement.
Businesses that are able to provide evidence that shows the above are more likely to have their terms enforced. The common types of evidence used to enforce clickwrap (and sign-in-wrap and browsewrap) agreements in court are: affidavits/declarations, screenshots, and back-end records of acceptance.
Screenshots
A screenshot is an image that displays what a screen looked like at the time of signing. Courts often rule in favor of terms on a page designed to provide actual or inquiry notice to a user. As a result, if the screen design is poor, the screenshot tends to sway the court towards not enforcing the terms. On the other hand, if the screenshot shows that the screen is optimally designed, the court is highly likely to rule in favor of enforcing the terms.
Affidavit/declaration from key personnel
Affidavits or declarations are written statements or sworn testimony from key personnel familiar with the contract acceptance process. A declaration is more likely to be successful when the person providing it has pertinent knowledge of the system being described and/or is in a role that familiarizes them with the contract acceptance process.
Back-end records of acceptance
Back-end records are records that contain data captured at the time of contract acceptance. This data indicates who accepted an agreement, when the agreement was accepted, and what version of the agreement that was live at the time of acceptance. When used as evidence to try to compel arbitration, back-end records are most successful when they showcase specificity and a high level of detail—that is, that a particular user signed a particular agreement at a particular time.
How to Design Best Clickwrap Contracts-
1. Active consent by the user: It is one of the best practices that the user can follow. The user must click on ‘I agree’, ‘Ok’ or ‘I accept’ button or ‘click on it’. The websites should not pre-check the box as the assent from the user must come actively.
2. Screen Design of the terms and condition: It is best practice to keep the layout of the screen before designing a Click Wrap Contract:
Simple and uncluttered.
The entire screen shall be seen at one time.
Use language which is easily understandable by the user.
Never use a contrasting color.
3. Give reasonable notice before termination of services: The user should be informed about the TOS in clear words like Terms and Conditions, Privacy Policy, User Contract must be written in a font that is understandable by the user. Clear notice of the Contract makes the Contract enforceable in a Court of law.
4. Contracts should be easily understood by laymen: The websites or software providers should remember that not every person will understand the legal terms of the Contract. Once clickwrap Contracts need to be written in a way that someone without a background in privacy can read, comprehend, and give informed consent to. The site should clearly tell its users to read the TOS to its users.
5. Revised Conditions should be rechecked: The TOS of the Clickwrap Contract if revised should be made to agree by the user again so that the user is aware of the new terms of services.
6. Specific Consent should be highlighted from the rest of the documents: I think to remember the service provider is that if they ask for permission for things like using user’s personal information, use it for marketing purposes, in such cases the TOS for such should be distinguishable.
7. Documentation: One of the most important parts of enforcing the Clickwrap Contract is managing the record as to when the consent was taken and on what version the consent was given. Unless we are unable to prove who accepted the Contracts and which version(s) of the Contract was accepted, then the Clickwrap Contract is not likely to be enforceable.
Conclusion-
The legal validity of Clickwrap Contracts can be seen worldwide and countries like the United States, United Kingdom, and countries in Europe have statutes specifically dealing with them but its legal validity is yet to be discussed in the Indian context. With the growing use of such Contracts online, Indian laws have fallen short in governing these Contracts. Inclusion of these Contracts in our Present Information Technology act or introducing appropriate statutes related to these online software contracts will be helpful for online users. A statutory sanction not only makes it valid but also avoids exploitation that in this case would unconscionable bargain power (contracts of adhesion) by the service provider.