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Clickwrap agreements: what they do and how they protect

On Behalf of | Jan 14, 2022 | Contract Disputes

Clickwrap agreements are binding contracts between businesses and consumers. These online contracts occur when a person “accepts” terms on a company’s website by simply clicking a button or checking a box that states, “I agree.”

Also known by other names such as click-accept, click-to-sign and clickthrough agreements, these contracts are enforceable the same way that traditional ink and electronic signatures are. Their purpose is simple: to protect companies and avoid potential legal entanglements.

Minimizing risk to your company

Due to the overwhelming ubiquity of clickwrap agreements, they seem – to the average person – as routine, normal and having little importance. But the latter description is not fitting. These agreements have significant importance in providing certain protections to businesses and business owners.

They represent the best way to minimize risk without affecting the customer’s experience. It is critical for companies to have these agreements and clearly explain and define their details on their websites. A solid clickwrap agreement includes an arbitration clause declaring that should any issues surface for the consumer, that person or company must go through arbitration and cannot file a lawsuit.

Details to include

Because of the complexity and specificity of these contracts, clickwrap agreements require the utmost scrutiny and security by businesses that enlist them. Similar to other contracts, a clickwrap agreement should include:

  • A prominent notice of a company’s terms of service
  • Specific consents that stand out so as not to confuse the public
  • Arbitration clauses that protect companies from lawsuits

Companies consistently rely on clickwrap agreements for signup or registration pages allowing the user to register and gain access into a company’s system; checkout flows that consist of a series of steps a person must follow to pay for a company’s products; and login pages in which users enter usernames and passwords to gain access to a company’s website.

A key difference with the similar sign-in wrap and browsewrap agreements is that the latter two require a two-step approach. That is, these agreements become “accepted” when users previously completed other actions. For example, sign-in wraps initially begin when users sign in, register or log in to the website, while for a browsewrap agreement, a user’s simple use of the website signifies acceptance.

Allowing you to continue to grow

Companies that rely on clickwrap agreements must understand how they work and make sure to clearly state every detail within this contract. Protecting your business is crucial. These contracts do that and allow you to focus on what you do best: growing your company.

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