In the Information Age, an increasing amount of data is communicated, stored, and shared electronically, and legal agreements are no exception. Digital agreements are more convenient, environmentally friendly, and are cheaper than their paper counterparts, making them the medium of choice for online businesses and Internet users alike. But, while fewer and fewer agreements are being printed, mailed, and physically signed, their ramifications are no less real. As with any other agreement, properly constructing the terms of a digital agreement is crucial if it is to serve its purpose as a legally-enforceable contract. How then should we design our websites and agreements to leave them enforceable, but without destroying the ease of use that is their biggest advantage?

Two types of digital agreements are commonly seen: the clickwrap agreements and the browsewrap agreements.  Clickwrap agreements are agreements that the website user is presented with a list of terms and conditions, which are often available in a scroll box, and users are required to click on an “I agree” box. For browsewrap agreements, the website’s terms and conditions are generally posted on the website via a hyperlink at the bottom of the screen, there are no boxes to click on, and the users give their assent simply by using the website. The two “wrap” agreements differs in two aspects: (1) did the contract offeror provide reasonable notice of the proposed term, and (2) did the offeree unambiguously manifest assent to them.

Courts view the enforceability of digital agreements as a spectrum, with clickwrap agreements at one end and browsewrap agreements at the other. The courts have recognized that the closer digital agreements are to the clickwrap end of the spectrum, the more likely they are held as valid and enforceable.  In Hancock v. AT&T, the 10th circuit stated that “Clickwrap agreements are increasingly common and ‘have routinely been upheld,’” because the terms of a clickwrap agreement are “clearly presented to the consumer, the consumer ha[s] an opportunity to read the agreement, and the consumer manifest[s] an unambiguous acceptance of the terms.” On the other hand, browsewrap agreements have been viewed with skepticism. For example, in Nguyen v. Barnes & Noble Inc., the 9th circuit declined to enforce a website agreement that was made available via a hyperlink on every page of the website but otherwise provided no notice to users nor prompts them to take any affirmative action to demonstrate assent. Similarly, in In re, the United States District Court for Nevada refused to enforce the terms of use located on every Zappos webpage, because the website never directed a user to the terms.

In order to enhance user experience, it may still be desirable to make the digital agreement available through hyperlinks, even though this places the agreement toward the browsewrap end of the spectrum. In those circumstances, steps can be taken to increase the likelihood that the agreement will be enforced. One way to do this is to add some clickwrap-like features, such as an “I Agree” button. The purpose of this is to give website users “constructive notice,” that is the users should have known the hyperlinked terms.  In Fteja v. Facebook, Inc., Facebook’s sign-up page consisted of several fields containing personal and contact information and a button that read “Sign Up.” After clicking this initial “Sign up” button, the user proceeded to a page displaying a second “Sign Up” button and a line read “By clicking Sign up, you are indicating that you have read and agree to the Terms of Service.” The District Court for the Southern District of New York stated that Facebook’s terms of use were like a browsewrap in that the terms were only visible via a hyperlink, but also somewhat resembled a clickwrap agreement in that the user must click “Sign Up” to assent to the hyperlinked terms. The Court concluded that the Facebook user had manifest his assent to the terms available by hyperlink, and “whether or not the consumer bothers to look is irrelevant.” Even though Facebook had a browsewrap style agreement, because they added some clickwrap features, the court still found it to be enforceable.

If a website contains an “I accept” button and a digital agreement is displayed in a scroll box, whether the agreement is enforceable still depends on whether the design of the website suggests that the button means the users accept the terms you want users to be bound to, and not anything else.  In Sgouros v. Transunion, before obtaining a credit report, a user was presented with a page requiring him to enter several fields of personal information, a service agreement in a scroll box, an “I Accept & Continue to Step 3,” and a block of text right above the click button that read “you understand that by clicking on the ‘I Accept & Continue to Step 3’ button below, you are providing ‘written instructions’ to TransUnion Interactive, Inc. authorizing TransUnion Interactive, Inc. to obtain information from your personal credit profile from Experian, Equifax and/or TransUnion….” The 7th circuit declined to enforce the service agreement because TransUnion’s site told the user that clicking on the box constituted his authorization for TransUnion to obtain his personal information. TransUnion failed to get the message out that the “I Accept” button meant agreeing to the service agreement.

No one wants to be hit with the unpleasant surprise that their digital agreements were actually never enforceable. Rather than finding this out by getting hit with an adverse verdict after the fact, it is crucial for website owners to proactively evaluate their digital agreements to ensure that they conform to the rapidly evolving expectations of users and of our judicial system.