The Terms of Use, Terms of Sale, Subscription Agreement, Privacy Policy, etc. are all contracts you ask visitors to your site to accept. Legally, they are classified as either “clickwrap” or “browserwrap” agreements. How binding are they?
A browserwrap agreement is typically a hyper link to your Terms of Service, Terms of Use, Privacy Policy,etc. Your customer is not required to read or acknowledge before they access your website, you can not prove they read. It puts them on notice of your policies, sometimes. Do you have them hidden away in the footer with a bunch of other links? A brick & mortar analogy is a sign saying ‘All sales final, no returns,’ ‘local checks only’, etc.
Clickwrap agreements take it a step further. There is a box you must affirmatively check. This active action by the user is an acknowledges that they read and agree to the terms of the contract (even if they didn’t actually read them). You are familiar with these and courts generally uphold them as binding. From weakest to strongest they include: a box you click saying “I agree” with a proximate hyperlink to the terms; a box containing the terms you scroll through followed by an “I agree” button, and box containing terms that you must scroll through to the end before you the “I agree” click box becomes live. Note that in all of these, there is still no requirement that you actually read the terms. Regardless of whether you have read, once you click “I agree” it creates a binding contract. The brick & mortar analogy would by your typical contract, purchase order, etc. that you sign. In both cases whether you read or understood it is generally irrelevant.
Two of the most litigated provisions in online agreements are Venue and Mandatory Arbitration clauses. Venue dictates where any lawsuits must be brought – you obviously want this where you are based. Mandatory arbitration is common because it is less expensive, usually confidential (less negative PR) and less likely to result in huge damage awards.
Tips – what should you do?
To make your Browserwrap agreements stronger:
The links are prominent (highlighted, bold, larger font, etc.) and on every page. Don’t bury them at the bottom of the footnote.
A disclaimer that continued use of your website binds them to the linked agreement is placed near each link.
The links go directly to the agreement. Recommend that it be a PDF available for your customer to download, save or print the agreement.
Use plain English in the agreement – good lawyers can draft easy to understandable agreements. (Yeah, that’s a throwdown!)
Use the same font as rest of the site, no fine print (make it smaller). Like traditional contracts, critical clauses should be bold, capitalized or otherwise highlighted
Links on shopping carts, payment / personal information pages are conspicuous and proximate to the Buy, Subscribe, or Checkout buttons.
To make your clickwrap agreements stronger:
Require the user to check a box or button clearly labeled I Accept or I Agree before they can purchase, subscribe, download, or take further action.
Offer an I Decline option, which takes them back to home page, exit page or pop-up.
Provide the agreement, or a highlighted hyper link, proximate to the I Accept button
The links go directly to the agreement. Recommend that it be a PDF available for your customer to download, save or print the agreement.
Use plain English in the agreement – good lawyers can draft easy to understandable agreements. (Yeah, that’s a throwdown!)
Use the same font as rest of the site, no fine print (make it smaller). Like traditional contracts, critical clauses should be bold, capitalized or otherwise highlighted
Links on shopping carts, payment / personal information pages are conspicuous and proximate to the Buy, Subscribe, or Checkout buttons.
It will cost you much less to have an attorney prepare a strong contract (Terms of Use, Privacy Policy, etc.) than to litigate a vague DIY agreement. Never just copy these agreements from another website, you are infringing their copyrights and creating more liability for you rather than reducing it!