You agree to online contracts all the time

You sign online contracts every time you browse the Web, install some application or do just about anything on your devices. This is how it works.

How many online contracts did you agree to, today? Everything in this day and age is done online – whether it is shopping, browsing Wikipedia, sharing your thoughts on twitter or posting pictures on Facebook. In fact it has become so prevalent that people of absolutely all ages are occupied almost throughout the entire day with updates on their phones, tablets, laptops and PC’s. We are always connected and with that comes its own quagmire of “what am I actually agreeing to?”.

How you agree to so many online contracts

During your online shopping spree or when uploading a picture of yourself and your beloved feline companion, you have almost certainly come across an “I agree” button. Whether it is agreeing to provide a website with your location and/or email address (for location accuracy purposes) or whether you are agreeing that you are actually entitled to upload the picture, you are agreeing to “something”. That “something” is typically an online contract.

And, instead of fully understanding what we are agreeing to, we have simply become a species of “yes people”, only to happen to click the “I agree” button just to get your music download or complete your purchase. But what does that actually mean? By clicking on that ever increasingly intimidating “I Agree” button, we as online users may be binding ourselves to legally enforceable contracts with the online service provider. And I don’t know about you, but that really scares me.

But did we, as online users, actually “agree” to anything, really? As with any legal agreement, both sides, including the user, must agree to the online contract in the form of the terms and conditions being offered by the relevant online service you are currently using, whether it is Facebook or eBay, in order to create a legally enforceable “agreement”.

Understanding the difference between click-wrap agreements v.s browse-wrap agreements

Some service providers ask for your agreement by requiring you to click the “I Agree” or “Accept” button after being shown the agreement (i.e. a “click wrap” agreement). A common example of a click-wrap agreement is where a consumer is transported, usually by clicking a hyperlink, to a webpage containing terms and conditions which will be included in the agreement, where there is normally (at the end of the page) a button with the phrase “I agree” or “Accept” printed on or next to it.

I agree Screenshot - WTL blog post

As its name suggests, a click-wrap agreement requires a positive act from a consumer, still other service providers, try to characterise your simple use of their website as your “agreement” to a set of terms and conditions buried somewhere on the site, a sort of “what agreement are you talking about” site (i.e. a “web-wrap” or “browse-wrap” agreement). The browse-wrap is similar to the click-wrap agreement, and is often used under similar situations, except for one rather important difference.

Not all online contracts behave the same way. Where a click-wrap agreement actually requires a positive action to indicate agreement, a browse wrap agreement does not. It is sneaky that way.

Sometimes the terms will be displayed on the web page being used and other times it will not. A kind of “out of sight out of mind” scenario. An online user is not required to click on the terms and conditions if it is provided via a hyperlink, and there are very few ways to actually ascertain whether or not such a user was made aware of the terms and conditions. There are other similar themes as the click wrap or browse wrap, such as mandatory checkboxes (“check this box to indicate your agreement to our terms and conditions”) or email notices (“by continuing to use our service, you agree to the recent modifications to our terms of service”).

But thankfully not all methods, be they click-wrap or browse-wrap, are good enough to create “legally binding contracts”. I sense a collective sigh of relief.

But when are online contracts binding?

But when or how will such online interactions constitute binding agreements? The consensus here depends on which region you are in – by participating in online transactions in whichever form they are in, we can all basically assume that the interactions here will most likely be cross or trans-border.

This does create some difficulty in the sense that some territories, like The United States, are more evolved in this aspect than others. For example in South Africa there is very little to no case law on this matter. In the UK and EU they too have very limited case law or Legislation based on what binds a user to online terms and conditions except to say that they have established one rule

an online user should be provided with all terms and conditions in a manner that is readily available and easily accessible without inappropriately or irrevocably binding a consumer to terms he had no real opportunity to become acquainted with.

It seems rather polite of them and a decent way to conduct oneself when interacting online. Could one say “typical of the British”? Whereas the US have accepted as a rule of thumb, the click-wrap agreement for its obvious enablement of the user to assent to the website’s terms and conditions. In other words the user, by clicking that “I Agree” button acknowledges that they intend to bind themselves.

In South Africa we are sort of playing catch up with both the US and the UK. In this regard and with the application of our contract law as well as our Common Law, one needs to look at the intention of the parties as well as the actual agreement of the parties. With click-wrap agreements it is quite easy to ensure that the user indicates their agreement by making a mark in the relevant space.

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In our Electronic Communications and Transaction Act, an electronic signature is defined as that of “data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature”. It is therefore accepted that the function of a signature is some kind of personal mark which may be used to identify a party and to convey or confirm an intention to be bound. Common knowledge, I would assume.

In this context, this “mark” as an indication of a person’s agreement is the same as a click-wrap agreement. This in essence leads one to believe that the click-wrap agreement is more than just an “I Agree” Button, but rather an “I have been shown the terms and conditions, have read them and have agreed to be bound by them” button. If you are like me, I immediately think of my iTunes account and the constant need to “accept” their terms of use when updating your version of iTunes account. If I am absolutely honest, I have never actually read the terms of use before clicking “accept”. As astounding as that sounds from someone of my vocation, all I really want to do is download my music or update my WhatsApp application.

Eeeek!

ALWAYS read the terms and conditions

Once I have finished writing this article, I think I will go avail myself (really) of Apple’s user terms and conditions and next time I click on the “I agree” or “accept” button make sure that I well and truly “Agree” or “Accept” because what I have learnt from writing this article (and which should be obvious) is that with everything, be it a written, a formal Contract or online terms and conditions – read before you click that button, it may hold more consequences than you think!

#justsaying

Author: Alicia Koch

Alicia started Alicia Koch Consulting in 2013, a move which has so far, proven very successful. She focuses primarily on the drafting, vetting and management of various forms of commercial contracts on behalf of various types of organisations, ranging from financing sectors to design companies, web based industries, advertising agencies and everything in-between. She is also able to provide a full legal function, including but not limited to advice around issues surrounding all commercial matters. Her interests include drafting bespoke Agreements for a variety of different relationships and outcomes, social media issues, cyber law risk, broadcasting and music licences to name but a few. She is always up for a challenge and describes herself one word – gumption.