These legal agreements are contracts that both parties - the company and the user - must act in accordance to. Most agreements, at least on websites, will typically be placed and linked from the bottom of the website:
Most agreements will have a language that says something similar to following:
Welcome to the Our Web Site ('Site'). Please review the following basic terms that govern your use of and purchase of products from our Site. Please note that your use of our Site constitutes your agreement to follow and be bound by those terms the 'Agreement').
Asana, a project management app, has the following introduction in the Terms of Service agreement that governs the app:
Notice the similar text at the "Your Use Of The Service" section:
By accessing or using the Service you agree to be bound by these Terms. If you are using the Services on behalf of an organization or entity ("Organization"), then you are agreeing to these Terms on behalf of that Organization and you represent and warrant that you have the authority to bind the Organization to these Terms. In that case, "you" and "your" refers to you and that Organization.
This kind of language in is there to outline that the rules set in the agreement must be agreed to by a user in order to use or access the service. The service can be a website, a mobile app, a Facebook app, and so on.
However, if the agreement is later disputed, it matters how you presented your agreements, its terms and its rules.
All businesses, especially online businesses, should take precautions to ensure that users have been properly given notice of any terms, rules, agreements or policies that they need to agree to.
Otherwise certain factors may affect the enforceability of an agreement later on:
Whether the agreement was presented in a clear and unambiguous manner
If the agreement was reasonably assented to
No business ever wants to take a dispute to court only to find that their legal agreement they were responsible for is not enforceable.
SaaS apps collect personal information from users
SaaS apps need a "Terms" agreement to set out rules, terms and guidelines on how users can use the app and not abuse it
Browsewrap and Clickwrap
Most legal agreements are often presented to users through either a clickwrap agreement or a browsewrap agreement.
The wrap portion of both words is a derivation of the shrink-wrap agreement, where customers would find a contract within the good that had been sealed or shrink wrapped within the good.
The shrink-wrap agreement would often state that by opening the package, the purchaser agrees to a set of terms and conditions.
Despite that "browsewrap" and "clickwrap" exists only the digital space, the method of use is similar to shrink-wrap.
A browsewrap agreement is almost ubiquitous across websites, but also for mobile apps and even for software apps.
The link to this "Terms and Conditions of Use" is at the bottom of the website, at the "Terms" link, as seen below:
This shows what a browsewrap agreement is: just a link to a legal agreement. It doesn't draw attention to the actual agreement or its terms.
Here's an example of language within an agreement to encourage users to read the EULA agreement of a software application and click either the "Accept" or the "Do not accept" buttons, but this EULA wasn't linked to as a clickwrap agreement but rather as a browsewrap agreement:
CAREFULLY READ THE FOLLOWING LICENSE AGREEMENT! IT CONTAINS VERY IMPORTANT INFORMATION ABOUT YOUR RIGHTS AND OBLIGATIONS, AS WELL AS LIMITATIONS AND EXCLUSIONS THAT MAY APPLY TO YOU. THIS DOCUMENT CONTAINS A DISPUTE RESOLUTION CLAUSE. BY CLICKING ON THE "ACCEPT" BUTTON, YOU ARE CONSENTING TO BE BOUND BY AND ARE BECOMING A PARTY TO THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, CLICK THE "DO NOT ACCEPT" BUTTON OR LEAVE THE WEBSITE.
A browsewrap agreement in a mobile app would simply be to link to a legal agreement from within a "Settings" screen:
This is in contrast with a clickwrap agreement. A clickwrap agreement is defined by:
Checkbox. The business will require a user to check or toggle the famous "I agree" checkbox in order to create an account, order a product, continue towards a new section of the website etc.
Notice. The business can also provide an increased notice of its legal agreements, i.e. "By clicking the following button, you agree to..."
These methods are exactly what browsewrap is not: the legal agreements are given increased notice in front of a user to maximize the chances that the agreements were read, understood and agreed to.
Engine Yard is providing its Terms of Service agreement as clickwrap agreement before you can create an account on their website:
This gives a user the opportunity to express consent to the entire agreement before proceeding further.
Other websites choose to give proper notice of the legal agreements without the "I agree" checkbox:
For agreements to be enforceable, all contracting parties must knowingly agree to all of the different aspects of the contract. Both parties must be aware or have had reasonable opportunity to become aware, of the existence of the terms of the agreement.
How this concept of notice applies to the two kinds of agreements can be distinct.
With clickwrap agreements, establishing notice isn't typically a problem. When the user accesses a website or mobile application that has a clickwrap agreement, in most cases the user will be asked if they agree to that agreement.
This is done before the user may access the content or the service of that website or mobile app. It provides the user with notice of the contract they are entering.
Airbnb presents their new Terms of Service agreement while a user opens their iOS app:
Forrest v. Verizon
An example of the effective use of a clickwrap agreement used to provide notice is shown in the "Forrest v. Verizon" case. In this case, a dispute arose between a customer and Verizon over a small clause detailed in the Terms of Service of Verizon.
The customer was upset over that particular clause and claimed that Verizon had not provided them with notice of this term. The customer had assented to a clickwrap agreement that was within a scroll box.
Across the top of the clickwrap agreement were the words:
PLEASE READ THE FOLLOWING AGREEMENT CAREFULLY.
The user was required to click that they agreed to Verizon's Terms of Service before they could continue with the completion of the transaction.
It's important to note that the Terms of Service scroll box of Verizon was:
Approximately thirteen pages
Difficult to read
The particular clause that was disputed in this court case was towards the end of the agreement as well.
In spite of those factors, the appellate court disagreed with the customer and determined that they were provided with ample notice.
By comparing the scroll wheel to a standard multi-page contract, the court cited the basic principle of contracts that when someone signs a contract they had an opportunity to read, they should be bound to the agreement, regardless of whether they actually read the contract.
DeJohn v. The .TV Corporation
In similar fashion to "Forrest v. Verizon", courts have continued to reinforce these contractual notions found in clickwrap agreements.
In "DeJohn v. The .TV Corporation", a court held that a clickwrap agreement was valid despite the terms of the contract being fairly inconspicuous.
The court echoed the notion that as long as the parties to the agreement had an opportunity to review the terms and click that they consent, they had been given enough notice.
Motise v. America Online
In "Motise v. America Online", the reviewing court enforced aspects of terms agreement against a customer of AOL.
The customer's stepson, who had never seen or agreed to the terms, was found to be a sub-licensee of the customer and was thereby bound to the same terms as the customer.
In light of these cases, lengthy legal clickwrap agreements that require user confirmation are enforceable, as long as a responsible user has consented.
Specht v. Netscape
Providing notice through browsewrap agreement is different.
Instead of requiring the user to manually agree to the agreement, the user implicitly agrees by mere use of the website or the mobile app.
The user never actually takes an affirmative action besides the use of the site or the mobile app.
In "Specht v. Netscape", an appellate court reviewed a browsewrap agreement on the Netscape website.
There, the user was presented with a download link for software and could only review the "Terms of Service" for that download by scrolling to the next page. The user had downloaded the software without having seen the agreement and then was sued for federal violations arising out of use of the software.
The court explained that one essential element to contract formation is the mutual manifestation of assent noting that:
[...] a consumer's clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking on the download button would signify assent to those terms.
Because the user was neither made aware nor required to be aware of certain terms before using the software, the browsewrap agreement was held to be unenforceable against the user.
Pingdom is making sure users are aware of the legal agreements they need to agree to before clicking the "Continue" button and create an account with Pingdom:
Hubbert v. Dell
However, other browsewrap agreements have been enforceable as long as certain measures were taken.
In "Hubbert v. Dell", customers using Dell's website were shown the words: "All sales are subject to Dell's Terms and Conditions of Sale" recurrently and were provided with an obvious hyperlink to Dell's Terms and Conditions agreement.
When a dispute arose over whether a customer was provided notice of the terms, the reviewing court made clear that repeated exposure of this nature would put a reasonable person on notice, as long as it was presented directly and unambiguously.
Browsewrap agreements do have the inherent protection that repeated use of or interaction with a website indicates a certain level of awareness of the existence and therefore notice.
Cairo v. CrossMedia Services
In "Cairo v. CrossMedia Services", a user had used the Cross Media Services website on numerous occasions.
When a dispute arose, the court found that Cairo's repeated use of CrossMedia Services formed the evidential basis that Cairo had a working basis and knowledge of the website, which included the Terms of Service agreement.
If you're using a browsewrap agreement, the more a user has had the opportunity to see and read your Terms and Conditions agreement, the more likely a court will enforce the Terms and Conditions agreement against that user.
Zaltz v. Jdate
There's some legal indication that a hybrid of the clickwrap and browsewrap agreement can be used to further provide enforceability to an agreement.
In "Zaltz v. Jdate", Zaltz sued the online dating website JDate for harassment related to billing in New York.
JDate moved to have the case transferred to California as it was agreed to in the license agreement displayed on JDates website. Zaltz had noted that she "didn't believe that she agreed to such a clause."
However, the court responded that:
[...] the fact that the plaintiff cannot remember the terms that she was presented with when she joined, or that she simply does not believe that she agreed to the terms, does not negate the uncontroverted and overwhelming evidence demonstrating that plaintiff could not have become a member of JDate.com without first agreeing to the websites Terms of Service.
Because JDate had a statement explaining that to join JDate, a user would have to click a specific box to accept the Terms of Service confirming that they did agree, JDate was providing both the information within the Terms of Service and some action that would confirm users consent.
This combination of the browsewrap and clickwrap elements allowed for JDate to enforce the Terms and Conditions agreement against Zaltz.
When considering which agreement would better protect your website or your mobile app, remember that the real objective is to clearly and reasonably provide notice to the user.
That could come in the form of a pop-up window with obviously labeled hyperlinks or several bold clear disclaimers across the top of the page, as long as it puts the user on notice.
eBay implements a similar technique with clear notice of the legal agreements a user must agree to in order to register an account with eBay:
For an agreement - clickwrap or browsewrap - to be enforceable, the agreement must have been consented to by both parties, and what is sometimes referred to as a meeting of the minds.
Consent can be broken into two categories: express and implied.
Express consent is clearly and unambiguously stated, and may be gained rather easily through verbal or non-verbal methods.
Implied consent is unspoken and is inferred from the person's actions or non-actions. Implied consent requires more to prove when enforcing an agreement.
Courts are less likely to bind a user to an agreement they implicitly agreed to.
Why is this important for website owners or mobile app owners when considering the enforceability of their agreements? Consent is a low bar to meet, but an essential element of contract formation.
To be enforceable, implied or express consent must be given by the user.
One problem with browsewrap agreements is the way they gain consent.
Users don't typically purposefully consent to browsewrap agreements. Rather, browsewrap agreements are written in a manner that gathers consent by the user's action, such as browsing a website. Therefore, the consent is implied and might be harder to prove when seeking to enforce the agreement.
Ticketmaster v. Tickets.com
In "Ticketmaster v. Tickets.com", Tickets.com had been taking information directly from Ticketmaster's website, making minimal formatting changes, and then placing it directly on its own website.
The reviewing court found that the browsewrap agreement wasn't enforceable because it didn't unequivocally prove that Tickets.com had given their consent.
Thus, browsewrap agreements can make it difficult to provide evidence that the user agreed to the agreements, its terms, and its rules.
Clickwrap agreements, by their very nature, gather consent. Because a clickwrap requires the user to manually click "I agree" before continuing, the low bar of consent is easier to demonstrate.
However, courts are less comfortable if the terms are unclear on the acknowledgement of consent.
Again, consent is a low bar and what enforcement requires is a clear indication that the user acknowledges and accepts the agreements.
I.Lan Systems v. Netscout Service Level
In "I.Lan Systems v. Netscout Service Level", a dispute arose whether I.Lan was subject to the terms of a clickwrap agreement.
I.Lan had purchased software from Netscout. Netscout had not placed their terms of the clickwrap agreement on their website until after the sale to I.Lan. However, the agreement was prominently placed within the software.
I.Lan had been shown the agreement and was required to check a box stating "I agree."
The reviewing court determined that being shown the terms within the software and requiring manual consent before continuing was enough to evidence consent.
However, consent is a nebulous term and for enforcement, all that's really required is evidence that consent occurred. Disputes that arise out of supposed unfairness need concrete proof of the disparity, otherwise, the court will find consent.
Scherillo v. Dun & Bradstreet
For example, in "Scherillo v. Dun & Bradstreet", a reviewing court enforced a clickwrap agreement against the user Scherillo.
Scherillo argued, that despite the fact that he checked a "Yes" box in relation to the legal agreement, he had not meant to do so. Therefore, he felt as if he had not consented.
However, the court disagreed, stating that the terms agreement was reasonably communicated, and based on the evidence a reasonable person would not have clicked "yes" to consent unless they actually consented.
Considering the values and weights of both the clickwrap and browsewrap agreement regarding consent, clearly clickwrap provides better enforceability. Although browsewrap agreements can implicitly gain consent, the benefit of clickwrap protections outweighs any slight difficulty passed on to the user.
A third factor when weighing the enforceability of clickwrap agreements and browsewrap agreements is whether the enforcement of the agreement would be fair.
While this sounds quite vague, there are two main elements of fairness at play.
First, whether enforcement of the agreement would be unconscionable.
An unconscionable contract is an agreement that no reasonably informed person would otherwise agree to.
Factors that contribute in the consideration of unconscionability are things such as age and mental capacity. Although for a user to prove that an agreement was unconscionable is a difficult task.
Second, whether the agreement the agreement was formed with an inequality of bargaining power. This is where one party to an agreement has better substitute options than the other party.
If a court finds this inequality to be so great that it is unfair, they'll refuse to enforce the agreement. This is a high bar to be proven. For a user to prove that an agreement is unfair is a difficult task.
However, similar disparities between clickwrap and browsewrap agreements present themselves here, as they do in other facets of enforceability consideration.
Caspi v. Microsoft
In "Caspi v. Microsoft", Caspi had agreed to the Microsoft clickwrap agreement, which had contained a choice of forums clause that stated all disputes would be brought in a court in King County, Washington.
Microsoft's principal place of business is in King County.
Later when a dispute arose, Caspi claimed that the entire clickwrap shouldn't be enforced because it was unconscionable. However, the reviewing court disagreed because there was no fraud, no unequal bargaining power, and Caspi had affirmatively agreed to the terms of Microsoft's agreement.
In this instance, Caspi had agreed to fairly reasonable terms and had done so explicitly.
The concept of clickwrap is also extended to how you announce changes of your legal agreements.
Because Microsoft's new "Terms of Service" and "Privacy Statement" might affect users and their rights, Microsoft is actively informing users about the changes.
Comb v. PayPal
In contrast, to this in "Comb v. PayPal", the court refused to enforce a browsewrap agreement for fairness factors.
PayPal's Terms of Service were provided to the user but did not require explicit consent before the use of any services from PayPal. The terms once printed were over twenty pages and ambiguous.
Based on these factors, as well as other attenuating circumstances, the reviewing court found that certain clauses were unconscionable and unenforceable.
Yet again, because of browsewrap agreement implicit consent and notice, clickwrap provide more protection of enforceability than browsewrap agreements.
It's important to note that these cases listed above are only directly applicable to US law.
However, they're still important for business owners outside the US. The laws of the U.S. do shape international policies as well and will set the foundation for other countries decision.
An example can be shown from a recent court decision.
In the Canadian case of "Century 21 v. Rogers Communications", Century 21 sued Canadian real estate search engine Zoocasa for infringing the agreement on Century 21's website, including breach of copyright and breach of contract.
Zoocasa's search engine was allegedly using Century 21's website information for Zoocasa's monetary benefit which was against the legal agreement of Century 21's website.
Canadian law on contracts "requires that the offer and its terms be brought to the attention of the user, be available for review and be in some manner accepted by the user."
The reviewing court decided that Zoocasa had notice of Century 21's browsewrap agreement and Zoocasa accepted it by their continued use of the website listings.
Therefore, Canada is mirroring the United States in forming their case law on browsewrap and clickwrap agreements to remain relevant in a digital age of mass commerce.
Interestingly enough, the court in "Century 21 v. Rogers" cited an overwhelming amount of U.S cases covering notions of contract law, browsewrap, clickwrap, notice, consent, and fairness.
This shows that other countries are looking towards U.S. courts decisions to inform themselves on where they might go as well.
In light of these court decisions, website owners or mobile app developers should take several precautions when deciding which implementation technique of the legal agreements they should use.
If your business is looking to use a clickwrap agreement, consider the following:
Clearly displaying the legal agreement in a clear and noticeable location on the website or within the mobile app before displaying the products or the services.
This can also apply if your website is an ecommerce store and your only agreement is just the Return and Refund Policy.
Making the method of acceptance or denial unambiguous.
Clearly indicating that by accepting the agreement, the user is on notice of the legal contract that they explicitly consented to.
If users can register an account on your website or mobile app, give proper notice of the legal agreements that they must agree to before they can create an account with you:
If you're placing a checkbox before users can continue with a certain action, such as "Register" or "Create an account" make sure that, if the checkbox is unchecked, users can't create an account:
If the checkbox is unchecked, provide a notice and don't process the registration:
If you're looking more towards a browsewrap agreement instead of a clickwrap one, consider several factors.
Another suggestion is to make the font of the links distinguishable.
The links font should be of a larger size than other fonts, perhaps a different style and a brightened or highlighted color.
Provide a notice with links to your legal agreements anytime a user either creates an account or purchases a good or a service.
When displaying the notice, require that the user takes some form of action to positively bypass the agreement if they choose. This allows demonstrable evidence that the user had clear notice and affirmatively bypassed the information to their detriment.
Finally, if any changes occur with an agreement, even small ones, notify each existing user of the changes you're making to that agreement.
Here's how Digital Ocean provides these kinds of updates right within the account dashboard of a user:
When it comes to getting agreement to your legal agreements, for placing cookies, sending marketing emails and other things you need consent to do, clickwrap is by far the way to go. It's the modern approach to consent, and it's likely going to be the only acceptable way to get consent in the future of privacy law.
Always use a checkbox and a clearly labeled button when possible to get the best level of compliant consent.