17 May 2011

Click And Gone: 3 Tips How Not To Get Wrapped By An Agreement

Because of the advent of the Internet, many suppliers will more and more often omit to serve their customers with paper based contracts.

In fact, do you ever remember to have signed a real contract with, say, Facebook or Twitter? Good, those may not be the best examples as they (still) provide their service for free. But, what if you were to enter into a consideration based contract and you were not provided an old-fashioned paper copy, but asked to click through a web form instead?

This is the question I would like to address in this blog article. Particularly, I shall show you how to read, understand and deal with such agreements.

Having got started, let me first explain what a

Click-Wrapped Agreement

is supposed to mean.

Terms such as click-wrap and browse-wrap are being more and more used to describe agreements where customers indicate their acceptance to an agreement as well as their readiness to “execute” said agreement by pressing a button on a website.

Recently I had to examine a click-wrapped non-disclosure agreement (NDA) provided by a technology giant known for its preference for web hosted documents.
I was asked a simple question: “Can I sign it (or have it signed)”?

Though I am technology-focused, I had some initial doubts. Sure, I was familiar with click-wrap licenses appearing on your monitor prior to either the download or the installation of a software as well as what courts had ruled on them. But an NDA? It felt somehow strange.

So, tip #1 – read the terms of the agreement.
Check whether it provides for the

Creation Of A Binding Contract

between two (or more) parties.

Basically, you need an offer, which is accepted with the intention to be legally bound. Should this work by clicking an HTML button?
Hmm, why not?
The act of clicking would be the expression of an unconditional acceptance to the terms of the agreement and hence fully sufficient.

Now that we have proved the valid formation of the contract, we should consider our next point:

Who May Press

the button?

Are you a party to the agreement, you can make the click. But what, if someone else should press it?

Time for tip #2 – check whether the person supposed to press the button is also authorised to do so. This is important because the lack of authorisation is likely to challenge the validity of the contract.

Once having identified the proper “signatory” you need to secure your

Evidence

At this stage, you should distinguish between two things: (1) you need an evidence that a contract has come into existence and (2) you must ensure that the content of the contract shall not subsequently be modified or manipulated.

Hence my tip #3 – make sure you are sent an email copy of the contract you have executed by clicking. The copy should bear the execution’s date and all relevant details such as name, address, signatory name etc.
Print out the copy, sign it personally (or have it personally signed by the signatory) and thereafter file it with your lawyer or, depending on your jurisdiction, with a notary public. This is how you can secure at least a prima facie evidence with respect to (1) and (2) above.

Concluding Thoughts

Click-wrapped or browse-wrapped agreements are driven by the online technologies and are ostensibly easy to handle. You have to know that courts have held them to be enforceable, though merely in single instances. Once you have executed such a click-wrap agreement, you should endeavour to better your stand applying an adequate contract management.

Why? In order not to be gone right after your click!