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ONLINE AGREEMENTS: THE ESSENTIALS
Conducting business online nowadays is an attractive commercial option for businesses to pursue. This is understandable when one considers that commercial expenses are kept at a minimum and there is the opportunity for numerous consumers to engage online sellers at any time. This flexibility means however that it is impossible for online sellers to negotiate each individual sale contract with consumers wishing to purchase goods and services from their website. As a result, e-commerce has utilized the click-wrap agreement to cover online sales transactions. The advantage with a properly drafted click-wrap agreement is that not only does it allow for a quick and effective means of conducting transactions, it also provides the online seller with all the necessary indemnity and protection afforded under standard contracts.
While the case law regarding click-wrap agreements is not as common as other contractual documents in other sectors of the economy, there is little doubt that if a click-wrap agreement is drafted appropriately, a court will find it valid and enforceable. The necessary provisions outlined below provide you with an overview of some critical functions required for a valid click-wrap agreement. If your agreement doesn’t utilize these features, chances are that you are running the gauntlet of having a void or invalid contract.
Firstly, a click wrap agreement should state clearly at the beginning of the agreement that the customer shall use the website, goods or software subject to the terms and conditions contained in the click-wrap agreement. This is imperative and any agreement failing to state this will run the risk of being unenforceable.
The “I Accept” and “I Decline” buttons need to be placed at the end of the agreement. This forces the user or customer to view the entire agreement before accepting and being bound by its terms. The click-wrap agreement should require the customer to perform an action when consenting to the agreement. The e-commerce industry has approached this by making the user or customer “click” the appropriate button when either consenting to or declining to use the seller’s products or services, here the term “click-wrap agreements”. If the user or customer declines to be bound by the click-wrap agreement then he or she should not be permitted to proceed to use the website or to downloaded software as the case may be.
The website operator should record the time and date that a customer consents to be bound by the click wrap agreement. This is important for evidentiary purposes and in case of any enforcement proceedings that may arise in the future.
To reinforce the click-wrap agreements validity, the website operator should also provide the customer with the opportunity to terminate the agreement at any time prior to final acceptance. This feature will strengthen the court’s view of the customer’s consent to the agreement and if a dispute does arise then the website operator will have a strong argument regarding the voluntary nature to which the customer consented and entered into the agreement.
Finally, after the customer consents to the click-wrap agreement, the website owner should require each customer to fill in a customer registration form that identifies the customer’s name and address. This should also be prefaced with a statement similar to that found in the click-wrap agreement that the customer shall be bound by the terms of the click-wrap agreement and that the customer has accepted and understood the agreement.
