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As evidenced by the rising clickwrap litigation rate and a decline in enforceability success, most businesses are failing to track Terms of Service properly.
But that doesn’t mean all hope is lost – far from it, actually. It simply means you need to rethink how you’re tracking your online terms. It’s time to move away from Facebook’s model of not being able to prove individual records of acceptance to enforce their agreements.
Instead, your legal team should implement a clickwrap solution that helps the business track three specific pieces of information: who signed your agreement, which agreement they signed, and which version of the agreement they agreed to. Otherwise, your contracts won’t hold up in court.
Affirmative assent is a concept at the core of digital contracting and tracking terms of service. So, what does this mean? And – more importantly – why does affirmative assent matter now more than ever before?
In today’s online-centric buying environment, courtrooms are looking at digital contracts differently. In order to be considered valid and legally enforceable, your team must be able to prove that every user takes explicit action to accept terms and understand the agreement they’re entering into.
And back-end records of acceptance via clickwrap are the key to enforcing your legal terms. By collecting data points and tracking the name, user name, email address, IP address, device, operating system, and other key identifying data of every individual that completes your transaction process, you’re able to prove every instance of affirmative assent. It’s easy for a judge to see precisely where, when, and how a specific user agreed to your exact terms and conditions.
In 2020, 70% of clickwrap agreements were successful, 64% of sign-in-wrap agreements were successful, and 14% of browsewrap agreements were successful. Compared to 2019, clickwrap and sign-in-wrap agreements increased in popularity while the use of browsewrap agreements decreased significantly.
In Holley v. Bitesquad.com, for example, the back-end records submitted included sufficient details to keep the organization’s clickwrap enforceable because their solution built an audit trail that tracked terms such as the email address involved as well as the time its employment packet is sent, viewed, and signed by each individual.
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Bitesquad’s detailed records proved that the organization’s employment agreements were both formally understood and agreed to – and therefore legally binding.
When using specific, high-level data points that prove a particular user signed a particular agreement at a particular time, your business maximizes its chance to protect online terms and conditions.
In order to successfully enforce your agreements, you need to be able to prove which agreement a specific user signed and which version of the agreement was live at the time of signing. Your back-end records should maintain this data. However, that task can be far easier said than done.
Businesses should track their terms of service changes and precisely how users interact with the terms over time. Which policies have they acknowledged? Have they accepted multiple agreements or just one? How do they give assent and how do you maintain that record of acceptance? These are just a few critical questions you need to be able to answer any time a transaction is finalized.
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Enforceable clickwrap agreements offer tremendous advantages. Beyond giving you an effective way to track and manage terms updates, clickwrap transaction platforms can also give you the ability to rapidly identify and pull user acceptance data into court-friendly reports. Say goodbye to the potential for unenforceable terms and rejected arbitration clauses.
Take Nager v. Tesla, for example. After Tesla failed to produce any evidence beyond a random document that didn’t connect to the relevant customer or transaction at hand, the court found its terms legally unenforceable. Without individual records of acceptance to prove which agreements its customers had accepted, Tesla ultimately failed to protect its online contracts – doing substantial damage to its brand and bottom line.
When it comes to your user acceptance agreements, remember specificity and accuracy at the individual level is key.
It’s probably safe to say that your online terms and conditions are constantly being updated. It’s inevitable – as the digital business landscape evolves, agreements need to be retooled and reimagined. So, your record-keeping methods and version control need to reflect that ideology as well.
Ultimately, a contract can’t be considered enforceable if the back-end records don’t match up with the correct version of the agreement. In most cases, it takes a clickwrap-driven solution to keep up with every change and prioritize accurate version control.
Related Content: Facebook Terms of Service: What Did You Sign Up For?
Apart from being a case study in how not to treat your users, Facebook’s ongoing litigation is a great example of why it is important to structure Terms and Conditions properly and actively track acceptance. Immutable acceptance records of initial terms and subsequent records of updated terms acceptance could have resulted in the dismissal of Facebook’s legal problems, leaving just the PR-related ones.
If asked to do so today, would your organization be ready to prove user acceptance and Terms enforceability?
Through back-end records and tracking your terms of service properly, your team should be able to answer these three questions and provide evidence. Otherwise, your online legal agreements – and business overall – is at serious risk.
Take our Clickwrap Litigation Risk Assessment to see your companies clickwrap litigation risk profile.