Clickwrap Best Practices at a Glance

Clickwrap Best Practices.pngDigital business models like Amazon and Dropbox use clickwrap agreements for executing their contracts because they are just as legal as paper contracts when implemented properly. 

When not implemented properly, it can be costly. Companies like GoGo Wireless, Safeway, BMO Harris Bank, and Zappos have all suffered the consequences of not following best practices with multi-million dollar lawsuits and costly litigation. So what are the next steps to properly implement these types of agreements?

Here are 6 of the best clickwrap practices to help you move forward: 

1. Provide conspicuous presentation

Present website legal agreements during site registrations or other clickable transactions so that they are unavoidable to users. Make it clear to your users that you are entering into a contract with them. It's up to you to responsibly track legal events within your app. 

2. Make notice of acceptance upfront and obvious

Clicking this agreement should be mandatory before a user can proceed. Make sure that it’s clear to your user both that:

  • There is a contract that they’re entering into with you
  • That your agreement must be accepted as part of purchase, account creation, etc. before moving forward

3. Obtain clear "manifestation of acceptance" from users

It has to be clear that your user has, in fact, accepted the legal terms. Generally, this is in the form of a check box combined with a statement that checking the box indicates acceptance of a particular agreement. Various companies do this in different ways — instead of adding a checkbox, many companies use their creation button (“Sign Up”, “Create Account”, etc.) to handle acceptance. Good practice would be to design a manner for your user to accept your legal terms in a way where they know they’re accepting them.

4. Give users clear opportunity to review agreements before accepting

Present agreements in a scroll box or provide opportunities to download or print the agreement when accepting. The most common practice to provide an option for reviewing agreements is a link to a hosted page showing your legal terms where your user can review, download, or print.

5. Design your clickwrap with version control and record keeping in mind

You should ensure that your implementation answers two very important questions as you’re looking to implement a clickwrap online:

  • If you had to prove who accepted your terms when they sign up, how would you?
  • What is the process for updating terms when you need to change that? Is it easy to do?

As disputes arise with your terms, versioning becomes very important. Having an easily accessible history of how your terms change over time is critical to enforcing them. Many times, companies will host their legal terms on the same page on their site and update it over time. This practice can be OK, as long as you’re able to manage definitive versions and marry versions of your terms with who’s accepted them.

Other companies use a legal system of record in place to verify what version of a website’s legal agreements was accepted on what date. This system can prevent many heartaches down the road as you go to publish changes, notify customers, etc.

6. Keep records of acceptance of modifications over time

Any time a legal agreement is updated, that calls for a new manifestation of user acceptance. Very few companies follow the best practice here, which is to get your users to accept the most recent version of your terms. Instead, many companies send out email updates notifying customers of updates. This type of communication implies acceptance and notice to customers, but our recommendation is a little more concrete. On top of sending an email out with information about the update, we recommend prompting users of your service (if primarily online) the next time they login with a clickwrap agreement. This way, you have proof both of the email being sent, opened, or clicked and a record proving the acceptance of those terms outright.

Being able to employ enforceable clickwrap agreements within your legal system of record is something that should not be dismissed or put off as an "I'll get to it" task. That's why we are here to help.

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