The Internet has changed how people search for information, communicate with each other and businesses, and purchase goods and services.
When people visit websites, web visitors are often presented with a Terms of Service or Terms and Conditions governing a web visitors interaction with that website.
These days, if you operate an online business – whether it’s an online clothing e-commerce store or a financial services advisory platform – you are naturally going to have most, if not all, of your terms and conditions online.
But what is the right approach to make sure that your customers are legally bound to your terms and conditions (T&Cs)? Is it enough to simply have a link to your T&Cs at the bottom of your website, usually at the very bottom of your landing page? Or is something additional required so your online user agreement is legally enforceable in case there’s ever a lawsuit?
In this article, we are going to look at 3 approaches to online user agreements: browse wrap, click wrap, and scroll wrap, and how these approaches compare to each other.
All three borrow the term “wrap” portion from the time when people bought software in boxes, with the software’s terms and conditions “wrapped” around the box. Once a buyer tore through the contract to open the case and start using the software, the company selling it deemed that an agreement had been made whereby the user was going to adhere to the terms set out in that agreement.
With the Browse Wrap approach, there is nothing for the website visitor to specifically agree to. The idea is that as long as the terms and conditions listed on the website -- usually on a separate page usually called “Legal” or “Terms” – says that each visitor or user of the website is bound to the terms and conditions, that’s all that’s legally required to make all the website’s terms and conditions enforceable. The legal reasoning here is that it’s reasonable that a website’s T&Cs are agreed to by anyone visiting the website long enough to consume/view content and/or potentially purchase products/services or otherwise make use of it in some way.
Click Wrap: here, a website will require a visitor or user to click on a “I Agree” button or something similar usually above or below a link to the website’s terms of service. Frequently, you see this approach when a user makes a purchase from an online store.
Scroll Wrap: with this method, a website brings up a box that includes all the website’s terms and conditions and then requires a user to actually scroll all the way down to the end of the terms and conditions before the user can click on an “I Agree” button or similar language.
Which Method Should Your Business Use?
Many businesses like to use a Browse Wrap approach. The reasons for that are entirely understandable: requiring a customer, especially if the customer is a consumer rather than a business, to even think about your legal terms and conditions is good way to slow down or kill a sale. It slows down impulse purchases and if a customer actually read all the terms and conditions, they might end up getting nervous about the purchase.
However, a number of court cases have held that the terms and conditions in a Browse Wrap online agreement were not legally enforceable.
Several court cases across the country and in New York State demonstrate the importance of making sure that web visitors have “constructive knowledge of that agreement.” In Berkson v GOGO LLC (ED NY 2015), it was found that any “reasonably prudent user” must be able to find and read the terms and conditions without difficulty. And in another case, Bassett v Electronic Arts Inc. (ED NY 2015), it was stated that terms and conditions must not be “buried at the bottom of a webpage or tucked away in obscure corners of the website.” Hence the importance of making them clearly visible and easy to find.
If there’s nothing in your online business’ terms and conditions you’re terribly concerned about, then Browse Wrap may be fine for you. However, if there are specific legal terms in your online agreement that are important – for instance, that your business will not be liable for certain kinds of damages or that a customer has to resolve any disputes by private arbitration instead of suing in a public court -- then MGLS definitely recommends that you at least use a Click Wrap online agreement.
A Scroll Wrap online agreement is even better than a Click Wrap agreement since it’s very difficult for a customer to say they weren’t informed about, and didn’t have an opportunity to review, your T&Cs before entering into a transaction with your business. And as Scroll Wrap online agreements become more and more common, any disadvantage from using them shrinks as more and more customers understand this is just how business online is done.
Disclaimer: This article constitutes attorney advertising. Prior results do not guarantee a similar outcome. MGLS publishes this article for information purposes only. Nothing within is intended as legal advice.