The Rise of Clickwrap Agreements & How They Affect All New Businesses

January 1, 2017
by Chuck Davis and David Henessey, Attorneys at Brown, Hay, & Stephens

What is Preview Day?

Whenever we make purchases online, download apps, or even create a fantasy football team, we agree to contracts. By clicking yes/ok/accept in a site or app, you agree to enforceable contractual terms known as a clickwrap agreement. When creating a website or app, it’s easy to for entrepreneurs to overlook these contractual agreements, but they are important to consider.

For years, form agreements were considered unenforceable if they were accepted by consumers without a true negotiation. However, with the rise of online and mobile transactions, the law has adapted. Now, clickwrap agreements are considered enforceable and vital to any entrepreneur. Browse-wrap agreements are another story. These are terms and conditions posted online which do not require a click for user to agree to them. Browse-wrap agreements are generally considered unenforceable.

Whenever a customer uses your services, you must answer questions regarding your return policy, use and storage of private information, warranties provided or disclaimed, and more. All of these issues should be resolved in a well-drafted clickwrap agreement to control risks in any transaction on your startup's webpage or app.

You may be tempted to reduce startup costs by using form agreements. However, you should always review and take care in creating clickwrap agreements and related policies. Otherwise, your business runs the risk of costly litigation and potential state and federal law violations.

Brown, Hay & Stephens holds office hours for members at Innovate Springfield on the second and fourth Tuesday of each month from 11:00 a.m. - 12:30 p.m.