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Click to Accept the Terms. Are you Exposed?

You’ve drafted website terms and online contracts that protect your business. What if the way they were presented on the screen made them unenforceable?

What makes a contract binding?

An enforceable contract has two key components: “reasonable notice” of the terms and a “reasonable manifestation of assent” to them. In other words, the user must be shown the terms and indicate that they agree. For most contracts, this is easy; a party’s signature shows that they have read and accepted it. The laws of Massachusetts and many other states apply this standard to all contracts, whether signed in ink, signed electronically, or agreed by clicking a box. 

However, there are many ways to present contract terms online, and not all are effective. Companies are often only aware once the terms are challenged in court or during due diligence for a merger or sale. The results can range from a minor inconvenience to significant legal liability.

Wrong Turn Lands Uber in Court

Even Uber has run into trouble. In the 2021 case of Kauders v. Uber Technologies, Uber sought to enforce a mandatory arbitration clause in its terms. On appeal, the court found that Uber’s terms did not bind users because the company’s online registration process was inadequate. The Uber app permitted users to click “Done” without reviewing the terms. Nothing on this page told users they should read and agree to the extensive terms and conditions. The only statement encouraging users to open and review the terms was displayed less prominently than other information. The court held that the parties had not formed a binding contract. Uber was forced into court rather than a less costly (and likely confidential) arbitration proceeding. 

The lesson from this and similar cases is that your online terms must meet the standards for a binding contract — informing users of the terms and requiring users to show that they have agreed to them.

Avoid “Browsewrap”

Many companies rely on terms in their online contracts that state that users are automatically deemed to have accepted an agreement by using the company’s product, service, or website. 

These contracts, known as “browsewrap,” do not meet the second part of the enforceability test. The user does not have to demonstrate their consent. 

Two alternatives are: 

1. Scrollwrap is a process that compels users to interact with the terms before agreeing to them, usually by making them scroll a box containing the terms before proceeding. 

2. Clickwrap requires the users to expressly click or check a box stating that they agree to the terms and includes an easy step to view them before proceeding. 

Making changes to online agreements requires a similar approach. Users must agree to the changes for them to be binding. It is not enough to present a pop-up saying that the terms have changed and inviting users to read them. Unless the user is required to view the updated terms and affirmatively agree to them, a court may find them unenforceable.

Are You Exposed?

There are as many ways to implement website terms as web designers. But a few simple sign-up or sales process steps can help ensure your contract is enforceable. These include ensuring that the terms are communicated clearly and that the language accompanying a check box is clear that the user is entering into a contract. Also, the scope of the terms and how they are communicated should be consistent with the nature and size of the transaction. 

The West Hill Team can review how you have implemented your website terms and other online contracts and advise you on updates to help enforce them.

ATTORNEY SPOTLIGHT: Louise Kennedy and Kim Prior join CWE to present Legal Considerations for “Women Owned” Business Certification 

Ready to get Certified as a Women-Owned business? The WBENC application can be daunting – we can help you navigate it. West Hill attorneys Louise Kennedy and Kim Prior join the Center for Woman and Enterprise (CWE) for a live webinar on Legal Considerations for “Women-Owned” Business Certification.  The webinars will live on June 8^th, and on July 13^th with CWE Board Member (and attorney) Deb Thomas and August 7^th with CWE Certifications Manager, Meghan Cunningham,

Sign up for the Live Webinar Today

Join this webinar for an overview of the process and criteria for obtaining WBE/WOSB certification. The process is much easier when you know what materials are required before you begin. 

A common reason that applications for WBENC certification are delayed or denied, is that the owner does not have the proper documentation about their business entity. Join us for an overview of the process and criteria for obtaining WBE/WOSB certification, including an explanation of the supporting materials that must be submitted for different business types. This is a live webinar and you will be able to ask the attorneys questions. 

“As a WBENC-certified woman-owned business, we know the benefits of certification.  The networking, education, and business development opportunities are unrivaled. But we also appreciate the challenges of pulling together the right documents for your application and renewal submissions.  We look forward to demystifying this process for woman-owned businesses with CWE.” 

Sign up today at the following links:  June 8^th, July 13^th and August 7^th.  

About CWE:

Established in 1995, the Center for Women & Enterprise (CWE) is a non-profit organization that  empowers women to launch and grow their business – so they in turn can drive economic growth, lift up their communities, and create a more equitable world.  CWE also operates the Veterans Business Outreach Center of New England (VBOC of NE) that equips veteran and active duty service members and their families with the resources to help them start and run their businesses.  

To learn more about CWE visit, www.CWEonline.org.  Find CWE on Facebook at www.facebook.com/CenterforWomenandEnterprise , Instagram at www.Instagram.com/CWETalk , Twitter at www.twitter.com/CWETalk , and LinkedIn, Friends of Center for Women & Enterprise.  

About West Hill:

West Hill Technology Counsel is a boutique business and technology law firm. Providing pro-active, practical legal advice to help solve problems before they arise. Our clients are new and growing businesses that create or leverage technology as a core part of their business model.