As businesses continue to innovate, they have used technology to make it easier than ever for customers to sign up for services or purchase goods through the internet. Many business and consumer contracts are executed online, via e-signature or, in many cases, through the click of a button. Though these express contracts are often challenged and disputed, both parties to the contract can usually agree to one thing: they both assented to entering into the agreement. There is another type of internet contract out there though, where the same cannot always be said, and they can be found in the fine print at the bottom of most websites, usually under the phrase: terms and conditions or terms of service.
Terms of service, or terms and conditions, as I will refer to it in this article, are now standard when browsing the web or engaging with online service providers. Terms and conditions not only unilaterally bind web users and site visitors to the website owner’s preferred terms of service, but they also protect website owners from potential liability.
Website terms and conditions are generally presented in one of two formats, “browserwrap” and “clickwrap.” Browserwrap covers contracts that are agreed to simply by continuing to use a site or engage with a service provider (i.e. if you do nothing, you’re agreeing to the terms). Think of the average website you visit and passively interact with but never agree to any specific terms. Somewhere on that site, you will find a small button that will lead you to terms and conditions wherein your use of the site is considered as consideration and acceptance of said terms.
Clickwrap, in contrast, requires an affirmative action by the user or customer before moving forward (i.e., “To continue using this website, please click the box marked “I Agree”). Although the names are similar, when it comes to legal challenges, clickwrap terms are often more likely to be enforced by a court. Users often challenge website terms and conditions, arguing they are contracts of adhesion and therefore, are unenforceable. That is, they fail to meet the two basic tenants of contract law: offer and acceptance.
Courts also disfavor terms and conditions that are modified or updated without the knowledge and assent of those bound by them. As noted above, the best practice for showing an individual is bound to terms is to show they made an affirmative action to agree. Therefore, even after a user has agreed to the terms once, any changes or modifications to those terms should also be expressly consented to by the user. Many businesses and websites require the user to click a button titled “I Agree” or similar language. Luckily for most businesses and website owners, implementing a clickwrap agreement is a simple and easy way to ensure their terms are enforceable.
Contracts can be great tools to limit risk and protect business’s rights. But they’re only useful if they’re enforceable. Knowing the legal requirements of effective online contracts is essential to modern businesses as they engage with online customers. Contacting an attorney can help you to ensure your contract terms effectively protect your interests and are able to be relied upon if needed. The attorneys at OVB Law and Consulting are experienced in business contract matters and will work diligently to protect your company’s interests.
