You’ve agreed to clickwrap agreements in the past, though you may barely recall doing so. It happens when you install new software on your computer or purchase an online software solution. During the purchase or installation process, you’re presented with a brief glimpse of the terms of service and the opportunity to either read them in full or simply click “I Agree” and enter into the contract. You have to accept these conditions in order to use the software and not accepting them means that you cannot continue in the process.
Courts across the US have analyzed these agreements and have, in some cases, found them to be enforceable. One such interesting case is Feldman v. Google where a company was purchasing adwords from Google and Lawrence Feldman, a lawyer by trade, clicked on the “I Agree” button. He claimed that because he was not given the opportunity to negotiate the contract, and further because it did not state specific price terms, it was not binding. The court disagreed and found that he was given the opportunity to read the contract and reject it if he had problems with it and that he was clearly qualified to understand what he was agreeing to.
This and other high profile cases against Amazon and Apple show that courts, generally, are going to enforce clickwrap agreements unless there is some reason not to do so. Generally, courts require that users are given an opportunity to clearly see and review the terms of service and they actively express consent to those terms by checking a box or clicking “I Agree”.
For businesses, even if an employee has not been granted authority to enter into agreements on behalf of the company, by having IT privileges that allow them to download software, they have apparent authority and can thus bind the company to these agreements. Major corporations often get around this issue by simply locking down computers and only allowing software that’s passed legal and technical review to be installed. In cases where clickwrap agreements are not enforced by courts, companies have been in the process of negotiating agreements and have clearly indicated to the software provider who in the company has the authority to bind them to contracts. Large corporations negotiate every agreement, including those that are commonly viewed as clickwrap.
If you can’t, or don’t want to, lock down your employee’s access to the internet, then the next step is to provide adequate training to employees to help them understand when they’re being presented with a clickwrap agreement and either review those agreements or pass them along to someone qualified to do so. Start by explaining how clicking these agreements and signing up for services without reviewing can have a negative impact on the business. Then, set up an efficient process for the review of these agreements so that the legal department is not preventing your team from moving forward with their work.
For help creating a terms of service for your product or reviewing agreements for your business, reach out to Virtus Law Firm by calling us at 612.888.1000 or emailing us at firstname.lastname@example.org. We have experience reviewing agreements and can spot terms that might cause issues. We can also help you negotiate agreements, even with major companies, to make it something that works for you.