Clickwrap

What is clickwrap?

A clickwrap agreement is an online agreement that users agree to by clicking a button or checking a box that says “I agree”. The purpose of a clickwrap agreement is to digitally capture acceptance of the agreement. Clickwrap allows companies to enter into a contract with customers without having to negotiate with each person individually.

For the vast majority of use cases, the clickwrap agreement has the same legal effect as a traditional handwritten signature. Clickwraps are thus an efficient and effective method for standardized agreements, especially for online transactions and applications.

A digital clickwrap solution enables version control (which user has accepted which versions of the agreement), as well as the ability to reacquire consent digitally after updating the agreements.

Is clickwrap a valid legal contract?

Yes, clickwrap agreements are as enforceable as traditional handwritten signatures or electronic signatures (provided they are captured following best practices, see below). Clickwrap is thus an accepted form of electronic signature: a binding, legally recognized form of contract formation.

Evidence types required to uphold clickwrap

Courts often decide whether clickwrap agreements are enforceable by judging:

• Whether or not the user expressly accepted the agreement
• Whether or not the user had actual knowledge of the terms, or was aware of them upon request
• the style and organization of the clickwrap agreement’s screen.

Companies that can prove the above have a greater chance of having their clauses enforced. The common types of evidence used to enforce clickwrap agreements in court are:

Screenshots

A screenshot is an image that shows what a screen looked like at the time it was signed. Courts often rule in favor of clauses on a page that allow the user to actually see the terms. If the screen content is poorly designed, the screenshot may cause the court not to enforce the clauses. On the other hand, if the screenshot shows that the screen content is optimally designed, the court is likely to favor enforcing the terms.

Back-end Records

Back-end records are records that contain data collected at the time of contract acceptance. This data indicates who accepted a contract, when the contract was accepted, and which version of the contract was live at the time of acceptance. When used as evidence, back-end records are most successful when they are specific and highly detailed, i.e., when they prove that a specific user signed a specific contract at a specific time.

Best practice for clickwrap design

Below are some general tips on how clickwrap agreements should be designed to achieve optimal clickwrap enforceability:

• Keep the screen layout simple and uncluttered.
• Use high-contrast colors for font and background.
• Use eye-catching font sizes.
• Make the whole screen instantly visible.
• Don’t check the checkbox in advance.
• Use consistent language.
• Use specific and clear wording to alert users to the existence of the clickwrap agreement.
• Mandatory for users to click the hyperlink to the terms.
• Advise users to read the terms before checking the box or continuing the process.
• Hyperlinks should look like traditional hyperlinks: blue and underlined.
• Require users to check a box to indicate their agreement to the terms.
• Require users to agree to the terms again after they have been changed.

Benefits of Clickwrap

Clickwrap is commonly used to handle some of an organization’s most important agreements, from online hosted terms of use within a website or app to comprehensive employee agreements. A Clickwrap agreement can be embedded on your website, presented via a dedicated URL, or delivered via text and instant message.

Clickwrap is suitable for all types of agreements and is perfect for improving business processes and meeting departmental goals. The nature of these agreements requires a higher level of control and security, so businesses need to know not only how agreements are presented and accepted, but also how to prove acceptance.

Is clickwrap better than electronic signatures?

From a usability, workflow, and overall efficiency perspective, clickwrap agreements are better than traditional electronic signatures. Clickwrap agreements offer more flexibility in agreement presentation and automatic acceptance tracking, and enable self-service workflows.

For which agreements is Clickwrap suitable?

Many agreements can be submitted as a clickwrap agreement. However, there are certain types of agreements that benefit the most from Clickwrap usage.

There are two types of contracts that can be signed with clickwrap agreements or electronic signatures:

1. standardized contracts typically have the same wording from person to person and can be accepted repeatedly and on a large scale by many or even infinite signatories. Think of agreements like NDAs or terms and conditions that apply broadly to every signer, no matter who it is.

2. personalized contracts are agreements that are typically processed on a smaller scale because they are tailored to specific signers and are not intended to be reused without being tailored again to a new, unique signer. These are contracts such as individual customer contracts, partnership agreements, etc.

The most useful application of clickwrap is usually observed in standardized contracts. Standardized contracts are best suited for automation and can be hosted and shared online as they do not need to be reviewed or modified individually before being accepted.

Summary

Clickwrap is the best way for businesses to limit their risk without compromising conversion or customer experience. Set up correctly, clickwrap agreements are legally binding and make everyday business easier for both companies and customers.