A Brief Introduction About the Click Wrap Agreement
A Click Wrap Agreement is a legal document that is created between two parties when either of them engaged in an online transaction of any form to the other or is purchasing a license to use a work product such as a software or a program. This agreement outlines the terms and conditions, along with the rules and regulations, which both parties need to follow before they can exchange work products or participate in an online transaction together.
In the creation of this legal document, there are two or more parties involved, depending upon the circumstances in which this contract is drawn. There are various types of Click Wrap Agreements in the industry, and changes are made according to the specifications shared by both parties.
Who Takes the Click Wrap Agreement? – People Involved
The most application of this contract can be found when two parties are participating in any form of online transaction, or licensing out their work product in the form of a software or program to the other for use. The first part is known as the company, and the second party is known as the user in legal terminologies.
A Click Wrap Agreement is sometimes also referred to as a click-through agreement, which is defined as an electronic contract clicking, which confirms the user’s agreement to the terms and conditions outlined the company and or manufacturer of the product in context. The most common application of this contract is found in enforcing software licenses and EULA or End User License Agreement. As this contract is completely online, it is a substitute for physical signature and is therefore widely used in the electronics industry.
Purpose of the Click Wrap Agreement – Why Do You Need It?
The essential objective of this agreement is to establish a legal understanding between both the organizations and to make sure that the interests of the individual parties, along with the collective, are protected at all points in time.
One of the most interesting aspects of a Click Wrap Agreement is found in how it is structured. As mentioned in the above paragraph, the end-user does not need to put a physical signature in order to accept the terms and conditions of the contract. Therefore, companies often undertake multiple approaches depending on their structural organization. Some of the very common alterations that can be found are:
Prompting the user to click the,
“Ok” button.
“I Agree” button.
“I Accept” button.
Most of these buttons are delivered to the user either in the form of a pop-up that comes up on their screen or at the end of the page. Without accepting the terms and conditions, the user will be unable to move forward with the transaction and take the desired action, which can be in the form of downloading software, making a purchase or using a product online itself.
The user has the complete right to deny the terms and conditions that have been outlined in the Click Wrap Agreement, but in the event that the user denies the terms and conditions, the transaction with the company and or organization is immediately terminated, and the user will not be permitted to use their service or product.
There is another form of a Click Wrap Agreement, which is popularly known as a type and click form. In this form of contract, there is a specified area where the user needs to type their name and then place an electronic signature, thus agreeing to the terms and conditions outlined in the contract.
Contents of the Click Wrap Agreement – Inclusions
Parties Involved: In this legal agreement, there are usually two parties involved; the first being the company or organization which is supposed to refer the clients or customers, also known as the Referrer and the second being the company or organization who will accept the referrals also known as the Referee.
Effective Date: This section of the agreement outlines the date from which this contract will stand legally binding and also the date on which the same can be dissolved.
Where does it Apply: This agreement is legally applicable within the boundaries of the state, city, or county where it was originally drawn at.
The use of a Click Wrap Agreement permits the company or organization to initiate a transaction with the customer and or end-user and let them use the product or service in context. This type of agreement is used as the company wants to sell a specific product or service to a mass audience, and in order to save time, they make a common contract and licensing agreement that can be enforced at all times. In order for these agreements to be legally binding, the company must ensure the following criteria are met:
The contents of the contract should be reasonable and visible to all the users; the company intends to sell the product to.
The company should not prefill the contract with certain information and, at the same time, should not make the contract unenforceable.
The contents of the contract should be written in simple and understandable English or the regional language, keeping in mind the average user and not filled with corporate and or legal jargon.
How to Draft the Click Wrap Agreement?
A Click Wrap Agreement can be drafted by simply following the steps mentioned below.
Organize a meeting both the parties and discuss upon the terms and conditions of the agreement, such as the specifications of the software that will be licensed to the user, from when this contract will come into effect, the time frame until which the contract will be legally binding and the funds that will be exchanged in order for this transaction to take place.
Once both the parties have mutually agreed to all the terms and conditions, reach out to a lawyer and ask him to draw up a Click Wrap Agreement according to the specifications discussed.
Get both the parties to sign the contract and get it registered in a house of law, as suggested by your lawyers.
As mentioned in the above sections, although the contents of a Click Wrap Agreement are vastly similar, yet depending on the country and or region you are selling your product at, the local laws and guidelines might change. Therefore while drafting your contract, make sure you consult your legal team and see what all the local guidelines are followed.
Another important aspect is that the contents of the agreement will change depending on the type of electronic media you are selling. For example, if you are signing up people on your platform, the format and contents will change, and if you are prompting them to download software, then it will change accordingly.
Negotiation Strategy
While negotiating a Click Wrap Agreement, it is important to note that both parties need to put forward their individual interests, while at the same time contribute to the larger cause.
Benefits & Drawbacks of the Click Wrap Agreement
Benefits of Having a Click Wrap Agreement
The contract clearly outlines the individual responsibilities, duties, and limitations and therefore makes sure that both parties are well aware of them at all points in time.
This is document acts as legal proof and thus can be produced in court if there is a need in the future.
Cons of Not Having a Click Wrap Agreement
In the absence of a Click Wrap Agreement, neither of the parties have legal proof of an understanding taking place between two entities, and thus if the matter is ever brought to court, both parties stand to lose.
What Happens in Case of Violation?
In the case of violation of a Click Wrap Agreement, certain remedies come into effect, and in a few cases, the contract is dissolved, and a new set of terms and conditions are agreed upon.
A Click Wrap Agreement document is designed in such a way so that both the parties involved in the transaction and or understanding are mutually benefited at the same time. Since this contract is a legal document, the same is legally binding in court and is meant to protect both parties in the event of a dispute, violation(1), and or misunderstanding.
A Click Wrap Agreement is so popular in the industries of today because of its wide application. Some of the most common applications of this contract can be found in the following places:
Online registration forms
Authorization for online banking
Download and installation of software from the internet
Creation of new user account
Online transactions of any kind
Connection of corporates or any open online network