A clickwrap is an online contract, often used for software installation and online transactions. Users accept the terms by clicking “I agree.” Clickwraps protect companies from piracy and allow for efficient contracting. However, users often don’t read the fine print, and unauthorized employees can bind a company. The enforceability of clickwraps was established in the 1996 case ProCd v. Zeidenberg.
A clickwrap is a contract formed over the Internet. It is commonly associated with software installation and online transactions. Sometimes called a clickthrough agreement or clickwrap license, a clickwrap typically contains the terms and conditions for using a particular online product or service. The user concludes the contract by clicking on the “I accept” or “I agree” button.
The term clickwrap originates from the shrink wrap found in the software packaging. By removing the shrink film that covers the package, the user effectively accepts the terms and conditions that the contract may stipulate. In a clickwrap agreement, this translates into the user continuing to use a program or browsing a website after clicking the “I Agree” button.
The rise of Internet transactions coupled with the prevalence of online downloaded software has created the need for a way to preserve the rights of both online companies and end users. Clickwraps are typically used to protect software licenses from piracy and to maintain property rights. They allow online businesses to contract with multiple parties without having to negotiate with each one separately. This is an efficient solution, as drafting individual contracts would take a lot of time. A clickwrap contract also allows the company to register electronic signatures and to include additional clauses not required by current IT legislation.
Clickwraps are a ubiquitous sight on the internet and with computer software. They usually appear as a separate page when registering on a website, such as creating an email account, logging into online banking, making online purchases, and installing new programs. In software, clickwraps typically include the End User License Agreement (EULA). The process will not continue unless the user accepts the agreement.
There has been criticism of the application of clickwrap agreements. It is said that most users don’t bother reading the fine print in the contract, opting to rush the process by scrolling to the bottom of the page and clicking the ‘I Agree’ button instead. The legal language used in the agreement can also confuse users, putting them at a disadvantage when they inadvertently abuse the product or service. Additionally, employees without proper authorization can bind a company when they personally engage in an online contract.
In 1996, the historic case ProCd v. Zeidenberg ratified the enforceability of a clickwrap agreement. The case involved Zeidenberg’s illegal distribution of information about SelectPhone, a program created by ProCd. The court ruling ruled that because Zeidenberg was able to install ProCd, it meant that he accepted the terms of use outlined in the program. Consequently, the illegal distribution of the program constituted a breach of contract.
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