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For most online agreements, the design of the screen is crucial to its enforceability because it indicates to the court whether or not the user was put on notice. That is, if the terms were conspicuously presented to the user as agreements between themselves and the marketplace and given sufficient opportunity to accept them. Without sufficient notice, (online) agreements are unenforceable.
There are several ingredients that go into a successful display of your terms. Each one needs to be thoughtfully considered if your design is to do the job it’s supposed to do. Here are some case law-based practices for enforceable screen design:
There are three ways to present your online contracts to customers/users of your marketplace app:
Because a clickwrap agreement uses a single purpose button, the user's acceptance of the terms is unambiguous. When used alongside other elements of screen design effectively, a clickwrap is often found enforceable in court.
That agreement screen must include some way for a user to view those terms in full, and the best way to do that is using a hyperlink. The hyperlink must look like a hyperlink. That is, it needs to be bright blue, underlined, and distinct from the other text on the page. Without this, it will be more difficult to prove that the user was put on notice of the terms, which is what happened to Juul when they tired to enforce their terms in court.
The background color must strongly contrast the hyperlink and the language surrounding the agreement. If the background does not provide enough of a contrast, then it can be easy to argue that there was no notice.
Online Terms Screen Design: Proximity
The agreement language, hyperlink, and acceptance buttons must be placed within close proximity of each other to make it maximally clear that they relate to each other and that accepting the agreement is a direct consequence of clicking the button or checking the box.
Arguably, some of the biggest challenges that Legal and Technical departments face with their homegrown terms management system is accurate, robust recordkeeping. Presenting the agreements using best practices is one thing; maintaining accurate, up to date records is another. After all, to enforce your terms, you have to prove that a user accepted it, when they accepted it, and what version of the agreement was live at the time of acceptance.
Not only do businesses’ relationships with vendors and contractors change, but laws and regulations change, too. In the last two years alone, there have been two major data privacy regulations enacted - GDPR and CCPA - with stricter requirements (and steeper fines) for (non) compliance. Businesses will need to update their terms regularly, notify customers of this change to meet compliance needs, and collect acceptances to these updated terms.
There needs to be record not only of a user’s original acceptance of a marketplace’s terms, but also of each updated version following. It is important to correctly tag and track a user and the version of the terms they agreed to, as well as other information that authenticates the user.
Ideally, pulling records is easy and automated, eliminating the need for tedious e-discovery. Maintaining a centralized location for versioned agreements and acceptances will help with this. Especially when defending a compliance violation.
For homegrown terms management systems, this can be a lot to keep track of and maintain, almost requiring teams dedicated only to managing online terms. When evaluating third-party solutions for terms management, ensure they meet these requirements.
To successfully defend your terms, three key pieces of evidence are required: Back-end records of acceptance, evidence of screen design (screenshots), and affidavits or declarations. Robust terms management as described above makes evidence gathering easier. Even better, when it is managed by a third party solution, they are the ones to provide affidavits/declarations, removing the burden from your Technical teams.
For more on the benefits of good terms management - and the pitfalls of doing it poorly - check out our latest eBook How Online Terms Can Make or Break Marketplace Apps.