Online contracts: click to agree

Do you read the T&Cs when you click "agree" online?

Do you read the T&Cs when you click “agree” online?

When millions of users signed up for ‘Pokémon Go’ they agreed to a term granting the app developers access to see and modify nearly all of their information on their Google accounts – including emails. We’ve been wondering how many users were aware of this. Were you?

In our online world, people are increasingly entering into contracts on websites without reading the terms and conditions. It’s critical that businesses know how to create enforceable online contracts that will stand up in court.

Common online contracts

Three main styles of online agreements are used in Australia. While there are no decided cases on their effectiveness here, international case law provides a useful guide.

The consensus seems to be that:

  • ‘Clickwrap’ agreements, which require users to scroll through the terms and conditions before clicking ‘I agree’, are highly likely to be enforceable as users are required to take positive steps to agree to the terms and conditions;
  • ‘Browsewrap’ agreements, which require users to click ‘I agree to the terms and conditions’ (or similar) and provide a proximate link to the terms and conditions, are also likely to be enforceable as a contract (but less so); and
  • ‘Webwrap’ agreements, which publish terms and conditions on websites without specifically drawing them to users’ attention or requiring them to indicate acceptance are even less likely to be enforceable as a contract (but may be in some circumstances).

Are all terms enforceable?

In the analogue world, it’s generally accepted that:

  • A signature binds the signatory to the entirety of an agreement, even if they did not read it; and
  • The more onerous a clause, the more important it is to draw it to users’ attention.

Does this also apply to online contracts? We don’t really know yet.

So the best approach seems to be that requiring a user to click ‘I accept’ (an online signature) is likely to bind them to standard (and uncontroversial) terms and conditions in clickwrap or browsewrap agreements. But non-standard or particularly onerous terms – like our friends at Pokemon Go – are unlikely to be enforceable unless they are specifically brought to users’ attention.

Tips to enhance enforceability of online contracts

Although untested by the courts, best practice approaches include:

  • Displaying the “I agree” button on the same page as, and below the terms and conditions, to provide reasonable notice of them to users;
  • But if the terms and conditions are longer than can be seen on a webpage without scrolling down, they will need to be put in scroll box which users must move through before clicking “I agree”;
  • Bolding or highlighting more important or onerous terms and conditions – to draw added attention to them;
  • Using “I have read and agree to the terms and conditions” instead of a simple “I agree” tick box. This simultaneously reminds users to read the T&Cs and requires them to confirm that they have done so.

By Peter Vrljic

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