Click Wrap Agreement or Click Wrap Contract

Click wrap agreement, In simple terms, it is an online agreement. Under this, the user affirms their acceptance by clicking on a button or checking a box that states, “I agree.” The main purpose of a click wrap agreement is to digitally capture acceptance of a contract. It serves as a quicker, legally binding, and digital alternative to traditional signatures.

This kind of agreement permits companies to engage in a contract with customers without negotiating with each user individually. It is said to be considered legitimate if the contract:

Clearly visible to all users.
Easily understood by the ordinary user.
Require active, affirmative consent.
Be enforceable.

Click-wrap agreements are a modern evolution of shrink-wrap licenses. Back in the last century, when software was primarily installed on local machines, shrink-wrap licenses were a popular way for software vendors to safeguard their intellectual property. By tearing off the plastic wrap from a new software floppy disk or compact disk, customers were essentially signaling their acceptance of the vendor’s terms of service.

Key Aspects of Clickwrap Agreements:

Basically it has active assent, unlike browsewrap agreements, which assume consent by browsing. A clickwrap contract requires an explicit action (e.g., clicking “OK” or “I Accept”).
These agreements are generally enforceable in nature. It is legally binding if the terms are clear and conspicuous and the user has a reasonable opportunity to review them before clicking.
The main purpose of this is to allow companies to establish legally binding contracts at large scale. Also without individual negotiations.
The common instances for using this are software licenses (EULA), terms of service, privacy policies, registration forms, and checkout pages.

Use Instances for click-wrap agreements

In today’s digital era, there are massive online users facing click-wrap agreements on a daily basis. Sometimes it happens to us, but we did not know that it is known as a click wrap agreement. There are some examples of the following given below:

When we install any mobile application, it must ask for permission; only then will it be installed.
Common among website visitors. They are usually asked for the acknowledgement of cookies on it.
When we did an online registration form, website registrations, and SaaS subscriptions.
Connecting to a wireless network through the internet is also part of this agreement.

Click-wrap agreements and the law

In situations where the same standard agreement needs to be offered or accepted by hundreds, thousands, or even millions of times, then “click wrap contracts” are generally used. They are frequently used while discussing online privacy rules or the terms and conditions controlling access to content on secured websites.

In order to guarantee understanding and consent, it is deemed best practice to draw attention to the contract by displaying a pop-up window with a checkbox and language like “I agree to the terms and conditions.” Additionally, a hyperlink to a page containing the whole agreement that the user is accepting must be included.

Click Wrap vs Browse Wrap vs Sign-in-Wrap Agreements

These are the common kinds of agreements that we face in our daily life on the internet. It is likely that you’ve seen these terms used interchangeably, and it’s very confusing. This table below of the distinction between them is significant to abate your confusion.

Clickwrap	Browsewrap	Sign-in-wrap
Specifically clicks “I Agree” or checks a box.	Uses the website; no action required.	Clicks “Sign In” or “Register.”
High in visibility: Terms are displayed or directly linked next to the action.	Low in visibility: Linked in the footer or an obscure location.	Medium in visibility: Terms linked near the sign-in button.
Active consent or express consent.	Implicit consent, but bundled with action.	Passive, inferred consent.
Enforceability is very high: almost always upheld in court.	Low enforceability: Often ruled unenforceable.	Moderate enforceability; can be challenged if not clear.

Definitions

Clickwrap: Under this agreement, users must click a button or check a box. The button generally says “I Agree.” It is necessary to click in order to proceed, such as during checkout or registration.
Sign-in-wrap: It consists of a hybrid approach where the act of signing in or creating an account is treated as acceptance of the terms. While it is often included the phrase like “By signing in, you agree.” to our terms.
Browsewrap: Links to terms are typically found in a website’s footer, along with a disclaimer that using the site indicates that you agree to them.

Are clickwrap agreements legally enforceable?

The answer is “Yes”, These agreements are legally enforceable. But the enforceability is depends on some requirement to make an agreement valid. If it is made by using unfair means (coercion, force, undue influence, or vague). In that case it cannot be enforced. The requirements for a valid click-wrap agreement we already discussed above.

But if it is valid, then they carry the same legal weight as traditional agreements with wet ink signatures. Despite the fact that clickwrap agreements that accurately obtain user consent and give clear notice of terms are upheld by courts. However, there may be severe legal and financial repercussions if the conditions of the contract are broken.

In the event that a click-wrap agreement needs to be defended in court, the party that issued the contract must have enough records to demonstrate the date and location of the agreement’s signing. This contains an unquestionable record of the contract version that was presented at the time of acceptance as well as the user’s perception of the website.

What is a Click-Wrap Agreement?