Clickwrap Agreement

What is a Clickwrap Agreement?

A clickwrap agreement is an online agreement that the user of an online service or software signs before he/she can use the service.
This agreement is displayed on the user’s computer/phone screen usually with ‘I agree’ and ‘I decline’ buttons to obtain the acceptance of the user. Usually, users have to agree to clickwrap agreement before they can use a visit a website, download content or sign up for a digital service.

The most common examples of clickwrap agreements are:

1. Terms and Conditions

Before a user can sign up to use a website/mobile app such as Facebook, Snapchat or YouTube, she/he may have to sign terms & conditions.
Another example is that a user may have to agree to terms of use when they try to use the wi-fi connection of a coffee house or a shopping center.

2. Copyright policy

Before a user can consume content on a website or an app such as YouTube or Wikipedia, they may have to agree to the Copyright policy of that website.

3. Cookie and Privacy policy

Websites/apps collect personal data of users by placing cookies on users’ computers to personalize their services. Users may have to give their consent to this privacy policy before being able to use this service.

Why do I need a Clickwrap Agreement?

Offering a clickwrap agreement to your users is useful for you for the following reasons:

1. Enforceability

A clickwrap agreement ensures that the users are informed about your terms & conditions or your privacy policy and they give their valid and active consent to your terms and policies. This makes your agreement legally binding so that you can enforce the contract terms against the users if they violate the agreement.

For example, your website may contain information about the daily potato prices in Australia. If you don’t want anyone else to obtain and use this information without your consent, you may prohibit the scraping of this information from your website by the clickwrap agreement.

If it comes to your attention that someone has then scraped your website in contravention of the terms and conditions, you can then sue them for breach of contract.

2. Practicality

If you have a website, app or a social media platform, thousands if not millions of users interact with your website/app or software and offering them clickwrap agreement is very convenient compared to traditional paper contracts. The later would cost more and harder to complete.

It is much more effective and saves you a lot of time and money.

3. Compliance

Major legal systems such as what you find in Europe require you to have privacy policies and obtain consent to use cookies. For example, if you want to sell the user’s data to third parties, you must obtain the user’s consent. Displaying cookies policy and asking for consent is the only valid way to not breach the law.

Considering these legal requirements, offering a clickwrap agreement to users is beneficial for you because it will ensure your compliance with the law.

What sort of clauses should be in a Clickwrap Agreement?

A clickwrap agreement may be used on a website, or a mobile application, or a software product (these are some common examples).
However, there are clauses common to all types of clickwrap agreements:

1. Consent of the User

Clickwrap agreements are like any other contract. They require a meeting of minds so that both parties must consent to the same terms. For this to happen, you must display your terms clearly and concisely and give the user the opportunity to accept or reject them.

All of the agreement terms should be accessible to a user if they want to review it before giving consent. This will ensure the enforceability of your agreement.

Therefore, it is crucial to make sure that user has access to all of the agreement and give his/her affirmative consent.

The more active steps that you require of a user before they sign up to a clickwrap agreement the better (e.g. forcing them to scroll to the bottom of the terms before they are given the opportunity to click the ‘I accept’ button).

2. Limitation of Liability

depending on what your website or app does, most likely you will want to limit your liability as much as possible.

This way if something goes wrong and you get sued, you can contractually limit the amount of money that could be obligated to pay out.

3. Modifications, maintenance to your website/app

Your website or mobile app or software product may have to go through changes such as new security questions before logging-in or it may be unavailable because of technical maintenance-related reasons.

You should add a clause stating that you are free to modify your website or you can suspend your website because of maintenance activities.

You may also add that you don’t have to provide a notice in advance. This will protect you from liability and any potential disputes.

4. Forum selection clauses

You and the user may get into a dispute related to the terms and conditions or indeed in relation to the privacy policy.

As your digital services may be accessible to everyone in the world, choosing a jurisdiction that is applicable for all your users may be to your advantage.

Imagine that you are located in Australia but your user is in Africa. If you have a legal dispute with your user, resolving where the court case could be heard could be challenging for you.

Therefore, having all your disagreements resolved in one jurisdiction is far more convenient. For that reason, you should make your terms and conditions subject to the law of one country (like Australia) and all disputes must be brought and heard by Australian courts.

5. Disclaimers

Such a clause will ensure that you do not take any responsibility for certain risk or damage.

For instance, your website may contain information about the analysis of publicly-traded airline companies but you may disclaim that any investment based on your analysis leads to your liability.

Stating that the material you provide is for ‘information purposes only’ is another example of a disclaimer and can be included in clickwrap agreement.

There are many other clauses that should be in a Clickwrap Agreement. These are just some we have chosen to talk about.

If you have any questions about a Clickwrap Agreement feel free to get in touch.