Is a Click as Binding as a Signature for Digital Contracts
A typical transaction between a vendor and consumer consists of payment in exchange for some good or service. There are certain terms implied in these agreements by law, such as a warranty that the product will do what it is supposed to do (the implied warranty of merchantability) and that the parties to the contract are acting in good faith (the implied covenant of good faith and fair dealing).However, often one party — usually the vendor or service provider rather than the consumer — wants to include additional terms to govern the parties’ agreement.
These terms may include a forum-selection clause (which mandates that disputes be litigated in a certain state or locale), an arbitration clause (requiring arbitration in lieu of litigation), and an attorney’s fee-shifting provision (requiring the losing party to any dispute to pay the attorney’s fees of the prevailing party), among others.
To ensure the enforceability of these provisions, one of the contracting parties historically would present the other party with the contract, perhaps review it with them, then the parties would each sign, taking a copy of the contract with them.
The parties each understood that the now-executed contract would govern the terms of their transaction.This traditional model lost its practicality as transactions became less personal. With today’s technology, a consumer can purchase a product from anywhere in the world with a computer and an Internet connection.
The consumer can consummate the purchase without ever meeting or speaking to the other party (or even knowing the other party’s identity), without any form of negotiation, and with no more effort than a few clicks and keystrokes.For better or for worse, vendors in many transactions can no longer give a physical copy of the contract, review its terms, or witness the signing. The alternative is to mimic digitally what was once done tangibly.
A vendor presents a contract online, asks a user to “sign” it digitally, and then expects that the physical contract’s skeoumorphic counterpart will hold up as readily as the original.
Any twenty-first century consumer will recognize these contracts of a new era. When purchasing software, online memberships, digital media,and the like (think iTunes, Amazon, Adobe, Apple, Microsoft), a user is guided through a series of screens where the terms of the contract are presented, and the user is asked to click to acknowledge agreement or perhaps enter their initials. These contracts, called “click-through” or “clickwrap” agreements, are substantially similar in form if not substance. And with few exceptions, they are as enforceable as their paper counterparts.
Several courts in the last fifteen years have had opportunity to scrutinize the validity of these agreements, though perhaps fewer than one would expect. There is a general consensus that as long as a few simple guidelines are followed, click-through agreements are enforceable as written.
To be enforceable, these agreements should have the following attributes:
—Agreement must be mandatory. If a consumer selects “I agree” or similar acquiescence to all the terms, the product is made available for purchase. If the consumer does not agree, the product is not made available to them.
—Agreement must be non-porous. The consumer cannot avoid agreeing to the terms through some shortcut or circuitous route, by making a purchase over the phone rather than online, for example.
—Terms and conditions must be made available to consumer before consent. The consumer must at least have the terms and conditions available, in full prior to consenting. It is not enough to acquire consent and then send an email to the consumer with additional terms and conditions.
—Consent is acquired through some action of the consumer. The consumer must be made aware of the terms and told that a certain action signifies consent to the terms. The action could include clicking “I agree” or “next” or the like; a typographic signature; pressing certain numbers over the phone; creating a digital representation of a signature, perhaps with a cursor or other device; or some similar action that unambiguously signifies consent.
—Additional certification requested. A second screen or dialogue box asks the consumer to confirm that they have read the terms provided. Although click-through agreements would still be subject to other contractual defenses, e.g., unconscionability, lack of competence to contract, statute of limitations, failure of condition precedent, etc., with these precautions, a click-through agreement should be as enforceable as a paper contract with the same terms.
Any twenty-first century consumer will recognize these contracts of a new era. When purchasing software, online memberships, digital media,and the like (think iTunes, Amazon, Adobe, Apple, Microsoft), a user is guided through a series of screens where the terms of the contract are presented, and the user is asked to click to acknowledge agreement or perhaps enter their initials. These contracts, called “click-through” or “clickwrap” agreements, are substantially similar in form if not substance. And with few exceptions, they are as enforceable as their paper counterparts.
Several courts in the last fifteen years have had opportunity to scrutinize the validity of these agreements, though perhaps fewer than one would expect. There is a general consensus that as long as a few simple guidelines are followed, click-through agreements are enforceable as written.
To be enforceable, these agreements should have the following attributes:
—Agreement must be mandatory. If a consumer selects “I agree” or similar acquiescence to all the terms, the product is made available for purchase. If the consumer does not agree, the product is not made available to them.
—Agreement must be non-porous. The consumer cannot avoid agreeing to the terms through some shortcut or circuitous route, by making a purchase over the phone rather than online, for example.
—Terms and conditions must be made available to consumer before consent. The consumer must at least have the terms and conditions available, in full prior to consenting. It is not enough to acquire consent and then send an email to the consumer with additional terms and conditions.
—Consent is acquired through some action of the consumer. The consumer must be made aware of the terms and told that a certain action signifies consent to the terms. The action could include clicking “I agree” or “next” or the like; a typographic signature; pressing certain numbers over the phone; creating a digital representation of a signature, perhaps with a cursor or other device; or some similar action that unambiguously signifies consent.
—Additional certification requested. A second screen or dialogue box asks the consumer to confirm that they have read the terms provided. Although click-through agreements would still be subject to other contractual defenses, e.g., unconscionability, lack of competence to contract, statute of limitations, failure of condition precedent, etc., with these precautions, a click-through agreement should be as enforceable as a paper contract with the same terms.
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