Clickwraps

Clickwrap Agreements 101

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Contracts have been around for thousands of years. But as the rest of the world (especially technology) evolves, so should your agreements. As an integral part of every business, your ways of presenting agreements need to be updated – otherwise, they just become a barrier to growth, efficiency, and security.

Clickwrap agreements are quickly becoming the foundation for a modernized, digital-focused approach to contracting because they deliver intuitive, empowering, and customer-focused buying experiences. For your business, that means deals that are more scalable, enforceable, and accelerated than ever.

eBook Download: The Definitive Guide to Clickwrap Agreements

What Is a Clickwrap Agreement?

A clickwrap agreement is an updated form of electronic signature where the act of signing is replaced by the clicking of a button or the checking of a box that includes acceptance language (i.e. ‘Accept’, ‘I Agree’, etc.) for the customer involved.

If this method sounds familiar, it’s because the idea isn’t exactly a new one. Clickwrap agreements were derived from  shrink-wrap agreements that are commonly used in instances where products are shipped to the buyer wrapped in cellophane. A note was included with each product indicating that by breaking the shrink-wrap, the customer was officially agreeing with and bound to the seller’s contract terms.

And these agreements operate identically – even if they’re technically a digitalized version of its predecessor. A buyer and seller are binding by contractual terms as soon as the customer takes a singular, specific action.

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Therefore, clickwrap is ideal whenever your goal is to provide a fast, efficient signing experience that also protects your organization and its contract terms. Clickwrap agreements can help you create a balanced transaction process that is not only legally enforceable, but also eliminates the negative impact a traditional pen-and-paper agreement has on your conversion rate and online customer experience.

Clickwrap reduces friction in critical sales processes such as signup flows and e-commerce checkouts by giving buyers a one-click experience – which is why they’re now considered the gold standard for repeatable, low-value contracts, website terms, privacy policies, and End-User License Agreements (EULAs).

And, unlike eSignature, a clickwrap agreement gives you an extra layer of security by collecting key data points to comprise an audit trail that tracks individual user acceptance. Should a worst-case scenario like a legal battle arise, your team now has proof via a specific action or path that shows every customer “actively assented” to your agreements.

Related Content: How to Create a Clickwrap Agreement

Clickwrap Agreement Enforceability

Clickwrap agreements – assuming that they’re designed, presented, and tracked in compliance with all relevant legal requirements – are every bit as enforceable as an ink or electronic signature in the United States. And there are two key pieces of legislation that outline the specific regulations regarding clickwrap: 1. The Electronic Signatures Act (ESIGN) and 2. The Uniform Electronic Transactions Act (UETA).

To make a long and overly complex legal story short, courts have ruled for years that clicking a button or checking a box to indicate your assent fulfills the requirement that “intent to sign” is demonstrated by a customer. UETA expressly states that the definition of an electronic contract signature includes “the standard webpage click through process.”

How Are Clickwraps Proven?

Clickwrap agreements are the best way to ensure an enforceable, auditable trail of acceptances for your online agreements. Just like any other contract, they follow the letter of contract law. That is, in order to prove your clickwrap agreement, you must be able to show that the user was put on notice of the existence of the agreement, had an opportunity to review the terms, and unequivocally accepted the agreement. Typically, this is proven using screenshots to prove what the screen looked like at the time of signing, affidavits/declarations from key personnel to describe the system used to capture acceptance, and individualized back-end records of acceptance. 

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Browsewrap vs. Clickwrap

From a legal standpoint, the power in a clickwrap agreement lies in its ability to expressly collect a customer's acceptance of your agreement. Simply hosting your online terms and conditions at a virtual location (a.k.a. browsewrap) is a much different – and much more risky – transaction methodology.

Typically placed in page footers or some other place where these terms don’t interfere with a website’s user experience, browsewrap is seldom seen by the people giving consent to them. In fact, these agreements hold up in court fewer than one out of every eight times they’re presented because consent can’t be given to a contract that isn’t clearly seen, read, and understood.

Benefits of Clickwrap

A clickwrap agreement helps you save time, empower your team, boost collaboration, avoid litigation, and improve your customer experience. Because they’re so easy to implement and manage throughout virtually any digital contract process, many businesses use them to move away from PDF and paper-centric systems entirely.

These agreements also give you flexibility in how you present your contracts to online buyers – making it possible to automate processes, eliminate confusion by limiting how many steps a customer can take, or offer self-service possibilities that can finalize sales 24/7 from anywhere in the world.

Here are just a few of the benefits a clickwrap agreement offers:

  • Provides peace of mind. These agreements give you a searchable database of acceptance records, making it easy to track and manage all legal content in the event it’s needed in a courtroom.
  • Makes contracting workflows scalable. Clickwrap delivers tools to build, refine, and publish agreements as business needs and customer expectations evolve.
  • Reduces friction and enhances control. A clickwrap agreement simplifies your digital contracts, speeding up deals and delivering customers your products faster. These tools also give you a standardized option to maintain continuity across varied contract terms and versions.

eBook Download: 101 Ways to Use Clickwrap

  • Improves customer experience. These agreements deliver a convenient, dynamic, and mobile device-friendly alternative to traditional contracts. Clickwrap also offers automated acceptance tracking to minimize human involvement, accelerating the overall process.
  • Increases conversion rate. By making your agreements more accessible and easy to interact with, and easy to sign, clickwrap maximizes your potential to close deals whenever contracts are involved in an online transaction.

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How Can You Use Clickwrap to Get Ahead?

However you decide to deploy them, clickwrap agreements typically feature some of your most important online terms and conditions. Whether embedded on your website, presented via a dedicated URL, or delivered by text/notification, these agreements help your business most when they’re used to improve online business functionality and achieve strategic goals.

Companies like banks that require signatures on the same page as the agreement should embed clickwrap directly into the contract. This forces a user to scroll through the entire agreement prior to accepting it – ensuring they can’t dispute any of the terms being presented at a later date.

If your online transactions are similar to community requirements or leasing agreements, affirmative assent is the best way to create a satisfying and convenient user experience. By asking customers to click a button, check a box, or leave their initials throughout a contract, you’re able to effectively balance an accelerated acceptance process with the need to call out their attention to specific rules/clauses.

Download our eBook, The Definitive Guide to Clickwrap Agreements to learn more about what clickwrap is and does and how it can benefit your business. 

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