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Every marketplace app wants to process higher volumes of transactions. But as volume increases, so does legal risk. In order to amply protect yourself as the volume increases, you need to carefully track every agreement in every transaction on the platform.
Every point of sale comes with some agreement - be it terms and conditions or other user agreements. Failing to properly manage those terms means inviting greater risk into your business. If someone tries to challenge your terms, you could struggle to enforce them if you haven't collected the necessary terms acceptance data in your app.
To make sure that you’re managing all of that risk, you need to be keeping careful records of the agreements your marketplace app collects. If you don’t do so, you’re opening yourself up to liability.
Here are three things to track in your marketplace app:
When it comes to enforcing your terms in court, is it important to be able to prove who accepted your terms. Providing individual back-end records of acceptance is crucial to success in court. This means tracking and storing key identifying information like name, user name, and email address, or details like IP address, device, and operating system. Without it, it is impossible to prove that a specific user agreed to your specific terms.
In 24% of cases over the past year, companies produced back-end records to show user acceptance of the terms. Companies in 65% of these cases were able to produce robust back-end records and successfully enforce their terms.
In Holley v. Bitesquad.com, for example, the back-end records provided by Bitesquad included sufficient detail to prove that the plaintiff accepted the agreement because the record consisted of an audit trail that included “the email address to which the employment packet is sent and the times at which it is sent, viewed, and signed by the employee.”
Their detailed record keeping was able to prove to the court that the agreement was formally agreed to and legally binding. You need a similar record-keeping system on hand so you can be protected as well.
Successful digital contracting systems are able to store precisely which agreement the user accepted.
You need to be able to track users' exact history with your service - which policies they acknowledged, which user terms they agreed to, etc. This goes beyond just being able to say that they checked an agreement box. It means having a detailed record of exactly what specifically they saw, when they agreed to it, and the terms contained within the agreement.
Comprehensive clickwrap solutions are able to track and manage this acceptance data, and also pull it quickly and efficiently to bring to court. The inability to provide this can lead to failure to enforce your terms and the arbitration and class action waiver clauses within them.
The court in Nager v. Tesla, for example, declined to enforce Tesla’s terms after Tesla was only able to produce “just some random document” that had no connection to the customer or transaction at issue, rather than individual records of acceptance.
Recording mismatched or incorrect terms means your contract is unenforceable. Specificity and accuracy is key.
Online contracts are always being updated. As the business landscape evolves, agreements need to be updated. This needs to be reflected in the records you keep.
Just knowing that someone accepted an agreement won’t be enough to make the contract enforceable if the agreement in your records doesn’t line up with the contract they agreed to. Version control is of the utmost importance in digital contracting, and you need a solution that can keep up with the changes.
A terms management solution succeeds when it tracks all three without a significant lift for your team. You don’t have the time to go back and manually retrieve all this information in case of litigation. Instead, you need a centralized hub that automatically categorizes each agreement.
A homegrown solution for managing terms in your marketplace app is not feasible - and here are three reasons that is true. An experienced partner can provide that for you, and PactSafe is here to help. Our comprehensive clickwrap solution tracks and manages acceptance data and version control updates. and keeps the data easily searchable, you can sleep easy knowing you’re protected.
For more on online marketplace terms management and best practices, read our eBook, How Online Terms Can Make or Break Marketplace Apps.