How Has the Pandemic Impacted the Clickwrap Industry?

How Has the Pandemic Impacted the Clickwrap Industry-01

The pandemic has brought about a significant amount of changes to the global landscape. Not least of which is the increase in online transactions. 2020 saw exponential increases in eCommerce and digital experiences. As a result, the need for, and usage of, clickwrap agreements skyrocketed.

Content Download: Clickwrap Litigation Trends: 2021 Report

Not too long ago, clickwrap was not widely known in the mainstream. Only technical teams and advanced legal departments were aware of the power of clickwrap. Even then, some were unsure how to get their clickwrap agreements to adhere to sophisticated processes and robust recordkeeping without IT managing agreements and legal sweating over whether or not the right agreements were connected to the right hyperlinks or embedded in the correct flows.

Over time, clickwrap has become more common place, and more consumers are familiar with the phrase “by checking this box you accept our terms of service.” And thanks to the pandemic, more and more people are completing transactions digitally and assenting to online terms with the click of a button (or check of a box). 

Pandemic = Growth of eCommerce = Growth of Clickwrap

As eCommerce becomes more prevalent globally, consumer expectations will change. In fact, according to a 2020 study by Shopify, more than 50% of consumers in North America not only prefer to transact digitally, but will also continue to primarily transact online, even after the current crisis has passed. Experts also believe that consumer patience is likely to decrease with the continued dependence on eCommerce.

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Notably, eCommerce isn’t limited to B2C transactions. In the age of massive digitally native experiences, more complex transactions take place online. A McKinsey study on self-service and remote buying found that consumers - including B2B buyers - now overwhelmingly prefer to do business online, and some are willing to spend up to $1 million in a single online purchase. The high value of this kind of contract means that the agreements associated with these purchases need to be seamlessly presented and securely managed, digitally.

But unless businesses have sophisticated back-end solutions for managing their online terms, this move to digital can prove to be a nightmare for Legal teams.

Creation of a Category: Clickwrap Transaction Platforms

In part due to the growing demands of eCommerce, the increase in the significance of clickwrap agreements has led to the creation of a new category: Clickwrap Transaction Platforms (CTP).

According to Aragon Research, who defined the category, Clickwrap Transaction Platforms “combine the ability to create, deliver, manage, track, and archive all the online terms and conditions that consumers and businesses agree to with a specified entity.” The increase in clickwrap litigation and the stagnant number of companies who understand clickwrap best practices provide great arguments for the necessity of such a piece of legal technology. 

The creation of this category is but one indication that both the use and necessity of clickwrap agreements will only continue to grow in significance. Understanding the state of clickwrap, litigation, and best practices, is a necessary foundation for protecting businesses transacting online.

Download: Aragon Research report on Clickwrap Transaction Platforms

COVID-Related Clickwrap Litigation

2020 has also introduced its fair share of COVID-related clickwrap litigation. Companies like Ticketmaster, Eventbrite, Uber, and others had to enforce their terms when consumers became frustrated with each company’s response to the pandemic. Some companies fared better than others, but all were subject to the sharp eye of the courts and established best practices.

Hansen v. Ticketmaster: Ticketmaster, for example, was sued by a class of consumers who said the company violated the law by changing their refund policy after the pandemic started. Fortunately for Ticketmaster, their online agreement presentation established an enforceable and binding contract with users, and they were able to enforce an arbitration clause.

Snow v. Eventbrite: On the other hand, when a class of consumers sued Eventbrite after shows were cancelled or postponed due to the pandemic, claiming that Eventbrite unlawfully withheld refunds, Eventbrite was unable to enforce the arbitration clause in their terms. Eventbrite was unable to provide the court with the exact versions of the terms consumers would have agreed to during the relevant time period, and Eventbrite wasn’t able to show the court the exact screen that consumers would have seen. As a result, the court declined to find a valid agreement.

Capriole v. Uber Technologies: Uber enforced their terms, which contained a forum selection clause, after a class of drivers sued the company for misclassifying them as independent contractors. This complaint was amended in light of the pandemic, alleging violations of the MA Earned Sick Time Law.

The Pandemic's Impact on the Clickwrap Industry

The tremendous changes in eCommerce have translated in the clickwrap industry as well. The volume of agreements being assessed in court is increasing, but the success rate is moving in the opposite direction. As clickwrap agreements continue to be seen as business critical tools, a new category has emerged of platforms that can facilitate both seamless eCommerce and secure, trackable agreements. 

For more on trends that have emerged in the clickwrap industry and with clickwrap litigation, check out our Clickwrap Litigation Trends: 2021 Report

clickwrap litigation trends 2021 report

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