Press Release: PactSafe Shares Findings from Clickwrap Litigation Trends

Aug 21, 2019 8:08:00 AM

CLT Press Release

(Indianapolis - August 21, 2019) - PactSafe, the leading high-velocity contract acceptance platform, today released findings from their Clickwrap Litigation Trends study. The report includes findings from a study of more than 1000 cases summarizing clickwrap litigation trends over the past 16 years and reveals what influences of validity for those agreements. 

The study revealed clickwrap litigation has skyrocketed 50 percent over the past five years. This is indicative of the increase in business to business (B2B) and business to consumer (B2C) internet companies having to defend the enforceability of their terms of service and other online agreement terms. The study found that there are three main ways of forming online contracts to successfully indicate acceptance of an agreement: clickwrap, sign-in wrap and browsewrap. In addition, it breaks down the difference between these types of agreements and their success rates in litigation. 

With the different kinds of contracts, courts also differ in their approaches to deciding on the issues. PactSafe’s study found the most successful attempts to defend online agreement terms rely on providing screenshots, affidavits or declarations, and back-end records indicating the date and time of contract acceptance. 

“Litigation regarding clickwrap is only going to continue trending up. With trillions of agreements signed each year, it is the most prolific form of contracting,” says Brian Powers, PactSafe founder and CEO. “It is possible to prove the validity of online acceptance, but the critical part is knowing what proof you need to do that.”  

Additional key findings from PactSafe’s Clickwrap Litigation Trends study include:

  • Cases that rely solely on affidavits or declarations as evidence are 78 percent successful in proving contract acceptance, while ones relying solely on screenshots were only 67 percent successful.
  • When validating modes of acceptance in court, a single purpose button or checkbox is deemed valid 97 percent of the time, whereas a dual purpose button is validated only 60 percent of the time.
  • There were 682 court cases discussing clickwrap, 33 discussing sign-in-wrap and 351 discussing browsewrap from 2002 to 2018.

Since the company’s launch in 2015, PactSafe, an Indianapolis-based SaaS company, has made contracts a seamless part of doing business for thousands of companies with a transformative approach that goes beyond traditional e-signatures. Customers process millions of high-velocity legal agreements daily with PactSafe’s modern workflow and innovative signing methods, which include click-to-accept and text-to-sign.

PactSafe raised $5.5 million in their Series A funding round in July 2018, following a $2.5 million seed round in November of 2015. For more information on PactSafe or their Clickwrap Litigation Trends study, download the full report or visit www.pactsafe.com

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About PactSafe: 

PactSafe is an Indianapolis-based high-velocity contract acceptance platform that allows marketplaces to generate legally-binding clickwrap agreements and track millions of acceptance events without affecting conversion rate. PactSafe helps companies like Angie’s List (Home Advisor), BMC Software, and Upwork update online legal terms, track and gain acceptance of those terms, and identify areas of potential risk before they become an issue.

Gizelle Fletcher

Written by Gizelle Fletcher

Gizelle leads the content team at PactSafe. She's driven by content that relays the significance of technology in legal departments and is always look at how consumer behavior influences new technologies.