Are most clickwrap agreements on the web enforceable? We surveyed 1,000 websites to find out.

Jul 6, 2015 12:23:16 PM

Browsewrap agreements aren't the only type of online legal agreement that could bring you trouble online.

Last Monday, we released Part I of our survey of the legal agreements found on the web's Top 1,000 sites -- recapping how browsewrap-style, terms-of-service links are often hidden at the bottom of the page. Today, we'll move on to the issues presented by clickwrap-style agreements -- and how those are being managed by the companies sit at the top of traffic rankings.

Wait, before we get going, can you remind me of what exists in a clickwrap agreement?

Clickwrap agreements prompt you to do something to actively agree to a given set of online legal terms. This might be by checking a box or clicking an "I AGREE" box during the sign-up process. If you've purchased something online, chances are you've come across one of these at some point, usually at either an initial registration or during the checkout process.

When building a clickwrap agreement, the key is often labeling and positioning the objects on the page for clarity. How do we know what passes the test? There's a simple question to ask: Is it obvious that clicking "Sign Up" or another similar button indicates that you've agreed to the terms? The Berkson v. GoGo decision tells us bluntly that placing a link to terms as part of a sign up process with a button that just says "SIGN UP" or "NEXT" just doesn't work to provide sufficient notice. Choosing to label your button with something besides "I AGREE" if a Terms of Use link is present could end up costing your company millions in a class-action lawsuit in a worst-case, nightmare scenario.

Okay, so are top sites on the web following this following this protocol?

When we viewed the top 1,000 sites across the web, the clickwrap agreements we found commonly broke out into three categories -- the good, the okay, and the oh no. 31% of clickwraps among top sites graded in to what we called the "good" category. These sites used a checkbox next to a terms of service link where users must agree to terms and then click a different button to proceed. The text often reads "By checking this box, you agree to our terms of service and privacy policy" or something similar. If you're looking to diminish your legal risk online, this is certainly the best practice to do so.

25% of sites are maaaaaaaaaybe protecting themselves from online legal risk in their clickwrap -- but could leave their agreements unenforceable depending on other factors. These sites don't feature a checkbox separate from the page usual click button at the bottom to advance the registration or checkout process. However, they have labeled the button "I AGREE" rather than "SUBMIT" or "NEXT." This certainly gives some protection, but could leave a company open to a judge's interpretation. What is the consumer truly agreeing to here? Is there supporting text or information in the layout of the agreement that would make it clear and obvious to every consumer that they are agreeing to these terms? Don't leave it up to a court to decide the fate of your clickwrap agreement: use a clearly-labeled checkbox that links to your terms of use and get better sleep at night.

But it could be worse. You could be part of the 38%. These sites don't even choose to use the "I AGREE" button, using instead a button that simply just says "SIGN UP" or "NEXT" instead. Here, there's no way for users to actively assent to any terms. And it's exactly the same type of clickwrap failure that cost GoGo millions of dollars. A small line of text that says "By clicking sign up, you agree to the terms of use and privacy policy" doesn't cut it -- and American courts have spelled that out in recent legal decisions.

Have a colleague that's still confused about what should go in a clickwrap agreement? Just send them over this infographic that might help.

ClickwrapReport (1)

 

You can let us take a look and evaluate your acceptance of terms process, too, free of charge. Get your Free Website Risk Assessment today. Sign up below!

Kyle Robbins

Written by Kyle Robbins