Clickwrap:
What is it? How does it work?

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Clickwrap is an element that your business needs depending upon how users interact with your software. Not having clickwrap agreements can result in confusion and subsequent disputes. Avoiding these issues can make your business more profitable and efficient.

Below, we’ve described everything you need to know about clickwrap, agreements, and more.

What Is a Clickwrap Agreement?

Clickwrap agreements are clickable elements that acknowledge a users’ consent to the terms and conditions of a website or application. They often apply to online agreements where users agree and clickthrough to via a click button or checkbox. Clickwrap agreements most often apply when users download content, make purchases, or sign-up for an email list.

This web page also discusses clickwrap.

Clickwrap Examples

Clickwrap is an unfamiliar concept for many business owners. However, examples can solidify your understanding.

Here is an example of how clickwrap works when downloading software:

  • Nadir Company offers software as a service (SaaS)
  • They help writers edit their content using automation
  • Before clients can use their products, they must agree to various agreements
  • Nadir Company uses a clickwrap agreement on their SaaS agreements
  • The company installs the necessary forms and elements to create consent

As you can see, clickwrap applies to the SaaS company’s agreements. They also create the conduit by which clickwrap functions.

Clickwrap vs. Browsewrap

Browserwrap does not require any interaction, nor do they require the users to click or accept a legally binding agreement. Lawyers often refer to them as “implied agreements.” Browsewraps can be found throughout a website, and they may contain links to clickable items with buttons that say “Continue” or “I accept.”

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Are Clickwrap Agreements Legally Binding?

Yes, clickwrap agreements are just as enforceable as traditional wet ink signatures and electronic signatures in the United States. This rule applies as long as they are legally valid and a binding contract . However, it’s always a good idea to review the laws that enforce and support these assertions.

There are a few critical pieces of legislation that deal specifically with clickwrap agreements:

Electronic Signatures in Global and National Commerce Act (ESIGN)

The federal Electronic Signatures in Global and National Commerce Act (ESIGN) made it easier to use electronic signatures and other electronic records in interstate and international business transactions. In these situations, ESIGN established several requirements, or standards, to determine the validity and legal enforceability of electronic agreements.

Uniform Electronic Transactions Act (UETA)

The Uniform Electronic Transactions Act (UETA) predates ESIGN, but both mandate that electronic signatures and electronic records are the same as their paper counterparts. UETA applies at the state level, and ESIGN applies at the federal level.

Clickwrap is a widely accepted electronic signature: a legally binding and recognized method of contracting. The UETA commentary explicitly states that “the standard webpage clickthrough process” is included in the definition of an electronic signature. Both of these Acts include detailed instructions for electronic compliance.

How To Create a Clickwrap Agreement

Contrary to popular belief, including a text that reads “by clicking below you agree to our terms” in registration or checkout flow is not enough. You’ll need a webpage for your terms and conditions.

Here are three steps you’ll want to take when creating a clickwrap agreement:

Step 1. Determine How You’ll Manage Clickwrap Agreements

While you can make a PDF with a checkbox embedded in it, it will work more like a traditional e-signature. Furthermore, using a static checkbox in a PDF or during an online transaction, it will not be easy to keep track of versions and records of acceptance.

To create a clickwrap, you’ll need to build a comprehensive system that includes back-end record tracking, complies with compliance requirements, and can be updated as required. Static text is insufficient and will not stand up in court.

Step 2. Ensure the Wording Meets Your Needs

Each signer must fill out input fields at the end of paper contracts, including blocks for names, roles, the date, and signature. These blocks become obsolete for clickwraps, and you can remove them altogether. Instead, create a standardized contract that meets your needs.

Step 3. Make Your Agreements Clickwrap Ready

Put your most commonly signed contracts behind a clickwrap to bring your business into the twenty-first century. Your legal department will gain greater competitive advantages, and you will see real, measurable business benefits.

Examples of agreements to make clickwrap ready include:

Your web designer or developer can help you implement the technological function of your clickwrap agreements. They can also work with your legal team to ensure the best possible result.

Tips for Clickwrap Best Practices

Online agreements have become an essential part of today’s marketplace as consumers continue to purchase more and more products and services over the internet. However, many online users do not read the terms and conditions before using a website or its services, as we all know.

So, how do you make sure your client’s online agreement is legally binding?

The American Bar Association recommends the following best practices for creating and displaying an enforceable online agreement:

Tip 1. Use Clickwrap Agreements

Online contracts are either “browsewrap” or “clickwrap” agreements. Users do not have to affirmatively agree to the terms before using the site or its services in some situations, whereas they do in others.

Courts have frequently refused to enforce browsewrap agreements due to a lack of reasonable notice or mutual consent but have generally upheld clickwrap agreements. They find that the user’s interactive behavior demonstrated both notice and agreement to the terms.

Tip 2. Automate the Process

Make it automatic and straightforward to access the terms of service. Because actual or constructive notice is required, it’s critical to make the terms as simple as possible to understand.

The consent box should appear at the end of the agreement, requiring the user to scroll or click their way through the terms before accepting. During the acceptance process, the user should be able to review the terms at any time.

Tip 3. Display Terms Clearly

Present them in a format that complies with any applicable laws governing structure and content, such as notice, disclosure, and conspicuousness. If the terms are illegible or otherwise hidden, a court is less likely to enforce the agreement. Speak with contract lawyers to ensure that your clickwrap agreements meet the minimum legal requirements.

Tip 4. Allow for Error Corrections

The acceptance process should allow for a review of transaction details and the correction of any potential errors. This element could include giving the user a summary of their order and confirming it before accepting it. Having a process in place for mistakes can also reduce the strain on company resources.

Tip 5. Maintain Accurate Records

Finally, just in case litigation arises, it’s critical to have a valid and consistent method of preserving records of the agreed-to terms and how the user expressed acceptance. Users should be able to save or print your agreements as well.

Make sure your online agreements include all of the substantive elements of an enforceable contract. Similarly, judges will not enforce unconscionable online agreements or include terms or conditions that are unreasonable or unfair to the average consumer. Speak with technology lawyers if you have questions about your clickwrap practices and agreements.

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