Have you ever read through all the terms and conditions of an online contract before clicking the “I agree” button? For most people, the answer is no and they would likely be surprised to find out what they are agreeing to. In fact, there are reports of various websites sticking in clauses where the user actually agrees to give up their rights to their first-born child just to see if anyone catches it! As predicted, many people agreed to it.
It is hard to be too judgmental, however, because many websites have online terms of use agreements that are ridiculously long. It has been estimated that if you read all of the terms of the privacy policies you are presented with over a one year period, it would take you more than 200 hours! It seems that clicking without reading has become a common occurrence in our world of technology. However, this can cause big problems when a dispute arises. Many online agreements actually waive the ability to file class action lawsuits and compel all disagreements to be resolved through arbitration. It is also common to see various warranties disclaimed and binding the user to a certain jurisdiction and venue for legal actions.
It is important to distinguish between click-through (or click-wrap) contracts and browse-wrap agreements. Click-through terms are ones in which the user specifically consents to them. By contrast, a browse-wrap agreement does not require the user to specifically agree to the terms , and the user must affirmatively click a hyperlink to access and actually see the terms… To learn more about browse-wrap agreements, please read our blog titled “Online Contract Formation: Are your “Terms of Use” binding?”
Click-through or click-wrap agreements are the preferred method for making your contract enforceable through your website or mobile app. They have been recognized by several courts as being valid and enforceable contracts because the user has provided explicit assent.
In general, courts have been hesitant to enforce browse-wrap agreements. Courts have reasoned that users are more likely to be apprised of all terms when they are forced to affirmatively accept those terms that are placed in front of them. However, this does not completely discount browse-wrap agreements. When a website operator can show that the user had actual or constructive notice of the terms, those terms might then be considered binding on the user.
It is also advisable to keep an eye on the Federal Trade Commission’s attempts to standardize mobile app terms. The FTC is aiming to make mobile privacy disclosures and agreements so they can be easily read and understood.
If you have questions regarding business law matters, contact us today to schedule an initial consultation. Leslie S. Marell has been practicing business and commercial law for over 25 years. She is established in private practice and has extensive legal experience counseling companies in the areas of business contracts and transactions, purchasing, sales, marketing, computer and technology law, employment law and day to day legal matters. Let us provide your company the advice and guidance you need.