Cases and Litigation

6 clickwrap litigation predictions for 2020

Legal Predictions Blog-01

Litigation relating to online contacts will continue to evolve in 2020.

As courts and lawyers become more familiar with cases involving clickwrap, sign-in-wrap, and browsewrap agreements, and as we continue to integrate technology into almost every aspect of our lives, we at PactSafe predict the following trends will occur:

Clickwrap litigation predictions for 2020

Clickwrap litigation will continue to increase

Clickwrap litigation will continue to increase. As discussed in our 2019 white paper on clickwrap litigation trends, there has been more than a 600% increase in clickwrap litigation over the past two decades, with close to a 50% increase in just the past 5 years. 

Success rates for companies trying to enforce terms will decrease

Success rates for cases in which a company seeks to enforce their clickwrap, sign-in-wrap, or browsewrap agreement will decrease.

In the past, courts have been quick to enforce a clickwrap agreement because it requires the user to perform some action (clicking a button or checking a box). However, courts have started (and will continue) to critique the presentation of all online agreements, regardless of type, and not push an agreement through just because it was presented as a clickwrap.

This is largely because courts have been raising their evidentiary expectations, demanding more robust evidence of contract acceptance than they have previously for all three types of agreements. Specifically, we have seen courts wanting to see concrete evidence of screen design, as well as individualized and more robust back-end records of acceptance (discussed in more detail below). 

Consumer-plaintiffs will start to present more intelligent arguments

Consumer-plaintiffs (and their lawyers) will find creative ways to fight against a company trying to enforce their terms in court. Consumer-plaintiffs are coming up with stronger, smarter, and more compelling arguments to invalidate online contracts like clickwrap agreements. Such arguments include lack of privity, failed contract formation, and fraudulent records.

Although consumer-plaintiffs have largely been unsuccessful with these arguments, the fact that they are coming up with them in the first place indicates that they are stepping up their litigation game to prevent the company they are suing from enforcing their terms in court.

Courts will have more sophisticated evidentiary expectations

As courts elevate their understanding of the underlying issues for acceptance of clickwrap, sign-in-wrap, and browsewrap agreements, they will raise their evidentiary expectations. As a result, there will be more reliance on screenshots showing what the screen looked like to the user, which will enable the court to better decide whether the user was put on notice that he or she was entering into an agreement.

Additionally, courts will require more robust back-end records that connect a specific user to a specific version of the contract at issue, rather than just a user ID with a date/time stamp and no mention of which contract.

Finally, companies will need to become more selective when choosing employees for declarations and affidavits. Companies will not be able to rely on just any employee for these documents; rather they will have to select employees with higher-level positions and technical backgrounds who have been at the company for a longer period of time and have first-hand knowledge of the processes at issue.

More standardized agreements will be converted into clickwrap

Another trend we expect to see is an increase in converting standardized agreements into clickwrap agreements.

Clickwrap agreements are great for capturing acceptance of contract terms that require little to no redlining, such as non-disclosure agreements, non-compete agreements, and some employment agreements.

Additionally, clickwrap agreements enable companies to eliminate redlining from agreements that they don’t want redlined going forward, such as licensing agreements. As a result, clickwrap agreements can be used to improve workflows, increase productivity, and streamline business processes, and we can expect to see more people utilizing clickwrap for standardized agreements. 

Moving towards third-party vendors and away from bare-bones homegrown solutions

We also expect to see a shift towards favoring third-party solutions for collecting and storing records of contract acceptance over more bare-bones homegrown solutions. One reason for this is that a number of regulations have either already come into effect or are on the horizon that require more formalized tracking of acceptance, including privacy policy opt-ins and opt-outs mandated by GDPR and CCPA.

Additionally, as courts continue to be more demanding with evidence of terms acceptance, many companies will learn (if they haven’t already) that they will save time, money, and reduce stress and anxiety by purchasing a third-party solution whose sole responsibility is to track terms acceptance in a way that will produce a legally enforceable record of acceptance when needed.

Get your online agreements right for 2020

Clickthrough litigation has increased significantly over the last few years. Are your agreements ready? Take the clickwrap readiness assessment to determine your level of risk of litigation.

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