How To Create A Shrinkwrap Agreement
Last year, April 19, 2008, I posted an article entitled Is a Clickwrap Agreement Enforceable?. The article defined the terms and gave a general understanding of where we encounter these types of agreements. My editorial comment dealt with my “natural aversion” to the non-negotiability of such agreements. Based on the number of hits the article receives, it is easy to discern the interest in the topic and it seems appropriate at this time to augment the article with a “How To” approach. During the course of my research, a colleague of mine from my days at SAP, Patricia A. Dalki, discussed her views on the subject. Patricia has done the heavy lifting on researching the “How To” approach when drafting such an agreement and has kindly shared her thoughts on the subject with me. Her research included an article by David L. Hayes of Fenwick & West LLP entitled, The Enforceability of Shrinkwrap License Agreements On-Line and Off-Line and she also cited an article I had included in my original posting mentioned above by Jason Haislmaier entitled, How Do I Build an Enforceable Online Agreement? – Not (Always) the Way SalesForce.com or Google Would.
With the kind permission of my friend and colleague, Patricia A. Dalki, here are some tips how to create an enforceable on-line agreement:
1. Record Evidence of User Acceptance
- Record evidence of user acceptance and the formation of each on-line agreement using a consistent, auditable process.
- By procedure – maintain evidence that the only way to access the service or product being offered is to scroll through terms and click “I accept” – user must have accepted.
- To the extent possible, keep records of time, date, and source of acceptance.
2. Require Acceptance Before Delivery of Services or Payment
- Require acceptance before payment or delivery of the services.
3. Make Rejection Clear and Simple
- Provide a clear, simple method for customers to reject the contract.
- Allow users to exit the process at any time.
- Do not require the customer to take additional steps or expend effort/money to reject the product or service.
4. Make Assent Unambiguous
- Secure an affirmative, unambiguous manifestation of assent to the agreement from the customer.
- The more the customer has to do, the better.
- Examples include:
a. Mouse click “I accept” or “I agree” button;
b. Type “I agree” and submit (speed-bump for users, but more deliberate);
c. “I accept” checkbox next to each provision, especially with an unusual or onerous provision; and
d. Offer alternative “I don’t agree” option with an explanation that the user cannot use or access the product or service.
5. Condition Use on Acceptance (covered in the introductory paragraph)
- Expressly state the user’s access to or use of the product or service is subject to these terms.
- Expressly state that you will not provide the product or service except pursuant to these terms.
6. Provide Notice of All Terms
- Draw attention to the on-line agreement.
- Make sure the customer sees it, e.g. no “below the fold,” small print, or hidden text.
- Place the “Accept” option at the end of all terms.
- Require the user to scroll though all terms before making the acceptance action.
- Consider requiring the user to check an “ I accept” box for each provision, especially for an unusual or onerous provision.
- No link to terms or scroll boxes
- Advise user to print and keep a copy of the agreement.
