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Since 2019, PactSafe has published a yearly report tracking trends in clickwrap litigation. Our goal was to provide an educational resource for understanding how courts assess the validity of online agreements. Not much had been written comprehensively on the topic before, but we keep track of these trends internally because they inform our product roadmap, so we decided to share our insights and the data.
As the landscape of clickwrap has evolved, so has our report. In our first report we found that clickwrap litigation had skyrocketed 626% since its first appearance in 2002 and determined that the three main types of online agreement presentations were clickwrap, sign-in-wrap, and browsewrap. We also determined the most common and most successful types of evidence that enable enforcement of online terms, which include back-end records of acceptance, screenshots of webpages, and sworn testimony from key employees describing the contracting process. Last year's report built on that same structure using more up-to-date statistics and court rulings.
This year, it is impossible to talk about clickwrap litigation trends without looking at the larger business atmosphere. The year 2020 was host to the first global pandemic in a century, frantic calls for sheltering in place, and the closure of thousands of businesses across the globe. It also gave rise to increased digital experiences as nearly every business either initiated or increased their online presence for transacting. Ecommerce and online selling capabilities became crucial to businesses that wanted to stay open. This meant that the use of clickwrap across industries has not only increased, but also changed.
And the increase in adoption also brings with it an increase in litigation. The overall success rate for companies trying to enforce their terms in court was just 60%, compared to 70% in 2019. Interestingly, this year saw more use of clickwrap in heavily regulated industries like finance, who made up 18% of clickwrap cases (compared to eCommerce and gig economy companies at 15% and 11% respectively).
In this report, we also examine the parallels between this and the data on clickwrap transactions we get from PactSafe’s platform.
Furthermore, we found that poor screen design is the most commonly violated best practice. 43% percent of companies failed to enforce their terms because their screens did not put users on notice of the terms. As a result, we’ve included a thorough assessment of effective screen design.
Download the Clickwrap Litigation Trends: 2021 Report now!