“Ugh, not this again. I’ll just click ‘agree’ so I can get back to what I’m doing.” 

If you’ve ever seen a pop-up on your screen asking you to ‘read and agree’ and you hit that agree button just to make it go away… 

You aren’t alone. 

97% of Americans say they’ve been asked, at some point, to agree to a business’ online contracts. Like a Privacy Policy or the Terms and Conditions. 

Of those, a mere 9% say they “always read the terms” before agreeing. 

And 36% of American adults admitted to never reading the terms they’ve agreed to.  

(Stats from a 2019 study via Pew Research Center.) 

With stats this dismal – how do you even begin to make sure your online contracts are enforceable? 

**Real quick before we jump in: 

Everything I share is legal education and information. It’s not business, financial, or legal advice, and it doesn’t create an attorney-client relationship between us.*

Clickwrap agreement

First, let’s look at what kind of agreement asks someone to click that little green “I agree” button from the example above. 

It’s a clickwrap agrement. 

A clickwrap agreement refers to a contract that is presented to the user on your computer – or mobile – screen that asks you to click a button or check a box that says “I agree” or “I accept” the terms of the contract in order to proceed beyond that screen. 

Hence why it’s so tempting to just smash that button and keep going. 

That said, clickwrap agreements give the user a real opportunity to read the contract before proceeding, should they choose to. 

(Though it’s usually not so easy to read – dense legalese in a font that’s probably several points too small will get you every time.)

Browsewrap agreement

Another form of online contract – the browsewrap agreement – is even simpler. 

A browse-wrap agreement is a contract or series of contracts in which the terms of the contract are displayed on a website page.  

By using the website, the user is presumed to agree to be bound to these contracts. 

Usually, the browsewrap terms themselves are found in a hyperlink in the footer of the website. 

But you don’t actually have to click on the terms for it to “count” as you accepting those terms. Just by using the website that the terms exist on, you are deemed to have agreed to them. 

Because of the fact that a user is automatically agreeing to terms just by being on the site, browsewrap agreements aren’t considered a best business practice. 

Using a clickwrap agreement where someone truly has the opportunity to read and affirmatively agree to the terms is considered best practice.

The law behind online contracts

So the burning question becomes – do clickwrap agreements, and browsewrap agreements make online contracts enforceable? 

And for the most part, the answer is yes. 

Here’s where it gets a little grey: 

Normally, a contract has to be negotiated between two parties who reach a mutual agreement.  

A contract that’s drafted unilaterally by a dominant party and presented as a final offer to a party with very little bargaining power is called a Contract of Adhesion.  

The terms are generally presented as a preprinted form to the weaker party, who lacks any realistic ability to negotiate the terms.  

In some areas of the law, these contracts are not enforceable. 

But it’s completely impractical for a website that handles thousands or millions of users to negotiate terms with each user. 

Because of this, most judges accept the practicalities of the situation and will enforce the contracts made via clickwrap or browsewrap. 

Even though the user has no ability to negotiate and often has not affirmatively agreed to the contract or even read the terms, the simple fact that the user had the opportunity to read it makes them enforceable in most cases.

The role of online contracts for business owners

Once you understand the types of online contracts and see your own behavior in how they’re used, you can see how this affects you as an online business owner. 

Besides urging you to start reading the terms you agree to online, you might want to consider how your own website operates – clickwrap or browsewrap – with your Terms and Conditions and Privacy Policy. 

(You do have those things, right? If not, please get them set up right away! You can find the templates in The Legal Shop.) 

And, while you’re at it, make sure you also enforce terms if you have an online portal or membership for your clients. 

Or if you sell digital products. 

Because operating without Terms of Use, Terms and Conditions, or a Privacy Policy can result in costly lawsuits and a whole lot of wasted time. 

It’s simply not worth going without them. 

Grab your free guide to starting your own online business. 

And then join the list of exclusive listeners of the Uncomplicating Trademarks podcast to learn even more about protecting that biz!

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