The Importance of Online Terms of Use – Clickwrap and Browsewrap

Terms of Use on Websites

Website operators function in a risky legal environment for liability. All web operators, especially for commercial websites, have a constant influx of users either purchasing products or merely visiting their webpages. All these web operators have duties to the rights of their users. Those duties can include adhering to online privacy laws, consumer laws, or general duties of contract.

In order to protect themselves, operators have attorneys draft “terms of use” to govern access and use of their websites. These terms can include: disclaimers, limitations on liability, arbitration agreements, or forum selection clauses.  However, like terms in a contract, these website terms are not always enforced by courts. The effectiveness of the terms depends on how they are drafted and placed on the website. Drafting the terms without legal advice can open the door to unanticipated problems. In addition, having unenforceable website terms may be worse than having none at all. The unenforced terms may give the web operator a false sense of security.

Clickwrap and Browsewrap Agreements

Website terms come in two forms: clickwrap and browsewrap. First, there are “clickwrap” agreements, where website terms must be accepted by checking a box (e.g.  “I Accept” or “I Agree”).  A common example, are the iTunes terms of use that require a user to check “Agree” before they can install the program. Of course, most users don’t read the multiple pages of terms when they install iTunes – nor do they read the terms for countless apps and programs we download or websites we visit every day. But despite not reading these agreements, once a user clicks “Agree” or “Accept,” courts will usually enforce those terms against the user. (Fteja v. Facebook, Inc. (841 F. Supp. 2d 829 (S.D.N.Y. 2012)). It’s only in unique circumstances (i.e. terms that violate contract law) that courts will not enforce these clickwrap agreements.

Second, are “browsewrap” agreements. These create the majority of problems regarding enforceability. Browsewrap terms are given to users via a link on the webpage (usually at the bottom of the page). When courts have to enforce these terms they look to whether the user had actual or constructive notice of the terms. (Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014)). The courts will inquire into details like the size, font, color, and location of the link to determine if the user knew or should have known about the terms. (Long v. Provide Commerce, Inc., (2016) 245 Cal.App.4th 855). The user’s own experience with the website and knowledge may be questioned as well. This is the reason these terms should be drafted carefully – to avoid the unpredictable results of litigating over the facts of a particular website and the user’s knowledge of the site.

Designing Your Webpage

Thus, with the enactment of more and more online laws, both in California and other states, it has become vital to consult legal specialists – such as those at SONA LEGAL APC – when designing a webpage. Legal issues regarding websites cover a wide range of topics including: e-commerce, online privacy, and contract law. Terms of use (and the websites that carry them) should be created with careful attention to these issues. An online business owner may find themselves litigating a dispute in court because the arbitration agreement turned out to be unenforceable.

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