With advancements in technology, many business transactions are carried out online with the click of a button. This approach has the advantage of ensuring that transactions progress almost seamlessly. The downside is that parties to agreements may bypass closely examining their rights before signing an agreement.
You have probably experienced both clickwrap and browsewrap agreements before, but may not have delved into the details of these digital contracts. Outlined below is a brief definition of each term as well as key similarities and differences between them.
Clickwrap Agreements
Clickwrap agreements (also referred to as “click-to-sign” agreements) are used for a myriad of business transactions. They carry out similar functions to a traditional business contract, only the process is completed digitally (and more efficiently). An example of a clickwrap agreement would be a popup box that appears when you download digital software and are asked to consent to the privacy policies of a seller, merchant, or other vendor. When you click the “agree” or “consent” box and continue with the transaction, then you are effectively signing a written contract.
Browsewrap Agreements
Browsewrap agreements are a type of digital contract. You are most likely to encounter them when asked to agree to the “terms of use” on a website. However, browsewraps are distinct from clickwraps because browsewraps automatically assume consent by a visitor simply because they arrived on the site, or use the service on the site.
Legal Enforcement
A notable distinction between clickwrap agreements and browsewrap agreements is the prospect of legal enforceability. In general, enforcing the terms of a clickwrap agreement has a higher success rate relative to a
browsewrap agreement.
Why? Because there are some fundamental components to a business contact, including:
- Offer;
- Acceptance;
- Awareness; and
- Consideration
These components are more evident in a clickwrap agreement since they usually provide a level of detail concerning the agreement and require an individual to take a moment to review the terms before clicking and consenting to move forward.
In contrast, a browsewrap agreement does not afford the same “moment of reflection” and ability to review the scope and parameters of an agreement. The enforceability of browsewrap agreements can vary depending on several factors, including the clarity of notice, the prominence of the terms, and the user’s actual or constructive knowledge of the terms. While enforceability may differ between jurisdictions, the following points generally summarize the considerations:
- Notice: For a browsewrap agreement to be enforceable, it is crucial that the user has reasonable notice of the existence of the terms and conditions. This can be achieved by placing a clear and conspicuous link to the terms on every page of the website.
- Actual Knowledge: If a user is aware of the terms and conditions and proceeds to use the website, courts are more likely to find the browsewrap agreement enforceable. This can occur if the user had previously agreed to the terms or was presented with a clear notice that accessing or using the website constitutes acceptance of the terms.
- Constructive Knowledge: Even in the absence of actual knowledge, a browsewrap agreement might be enforceable if the user should have been reasonably aware of the terms. This may be the case when the terms are prominently displayed, and the user had a reasonable opportunity to review them before using the website.
- Unconscionability: Courts may not enforce browsewrap agreements if they are deemed unconscionable, meaning they are excessively one-sided or unfair to the user. The terms must be reasonable and not overly burdensome or disadvantageous.
- Dispute Resolution and Choice of Law: The browsewrap agreement should include provisions regarding the resolution of disputes and choice of law. These provisions should be clear and fair to both parties.
It is important to note that enforceability can be subject to interpretation and can vary across jurisdictions. To enhance the enforceability of a browsewrap agreement, it is advisable to ensure clear and conspicuous notice, provide an opportunity for users to review the terms, and obtain explicit consent whenever possible, such as through clickwrap agreements or pop-up notices.
In short, browsewrap agreements are typically considered to be much more difficult to enforce in a court of law, as it is difficult to assert a user was clearly presented with details of the terms, let alone consented to them. Consulting with legal professionals familiar with the applicable jurisdiction can provide specific guidance on browsewrap agreement enforceability.
Have Questions? Speak to an Experienced and Knowledgeable Business Lawyer in Los Angeles Today
If you have questions about clickwrap and browsewrap agreements, take action and contact a knowledgeable business lawyer in Los Angeles at Hakim Law Group. Our business law firm represents an array of entrepreneurs, operating companies, venture capital firms, and financiers in various sectors of the economy and across different verticals. We take pride in providing the very highest levels of representation in addressing the legal and business challenges facing our clients today, tomorrow, and in the future. For further information and/or to schedule an appointment please contact Hakim Law Group at 310.993.2203 Or visit www.HakimLawGroup.com to learn more.
