At some point most of us have clicked the “I Agree” checkbox, indicating we’ve read and agreed to a website’s Terms and Conditions. Are these terms actually legally binding?
Yes, Terms and Conditions are legally binding as long as they’re presented to the user in an obvious manner and written in a specific way. Let’s look at what that means.
The Presentation of the Terms and Conditions Agreement
For a Terms and Conditions Agreement to be legally binding, it must be made obvious to the user. It’s the website owner’s duty to do everything reasonably possible to ensure the terms are visible; a link buried in the footer won’t cut it on its own.
There are two ways to present terms and conditions appropriately: clickwrap agreements and browsewrap agreements.
Clickwrap Agreements
A clickwrap agreement is an online contract between the website and the user. The terms are presented to the user, who must click “I Agree” or “I Accept” to continue, usually via a checkbox and a notice confirming that clicking it means agreeing to the terms. The user can choose not to agree, but then can’t use the service or purchase the product.
Clickwrap agreements let contracts be formed online, without physical paper and pen.
Browsewrap Agreements
A browsewrap agreement is also an online contract, but unlike clickwrap, it requires no action from the user: simply using the website is treated as consent to the terms.
A browsewrap agreement is more likely to be enforceable if it:
- Is located conspicuously, not hidden at the bottom of the page
- Is easy to access
- Links directly to the Terms and Conditions agreement
- Clearly tells the user that continued use of the website constitutes agreement to the terms
- Uses a readable font of at least 12 point
- Reminds users to read the terms before making a purchase
The Clauses of the Terms and Conditions Agreement
A Terms and Conditions Agreement can’t be vague about how it changes over time if it’s to be enforceable; it’s not enough to simply say the terms may be updated from time to time and that users should check back periodically.
You must include a clause explaining how you’ll notify users of changes, by email, or a notice on your website, the choice is yours, but it must be obvious.
Elements of an Enforceable Contract
To be enforceable, your Terms and Conditions must include all the required elements of a contract:
- The offer: the beginning of the contract, the proposed arrangement between the parties, including its defining terms.
- Acceptance: communicated to the user, typically that continued use of the website means agreeing to the terms.
- Consideration: something of value exchanged between the parties, most commonly a product or service in exchange for money.
- Competence/capacity: the user must be able to enter into a contract, most commonly meaning they’re of legal age (usually 18+).
- Mutual consent: the user must freely consent to the contract.
- Legality: the agreement is only enforceable if the website’s activity is legal.
- Written: the agreement must be made in writing.
Takeaways
To help your Terms and Conditions be enforceable:
- Be explicit: provide all essential information (and more) clearly and simply.
- Include the elements of an enforceable contract: make sure all of them are present.
- Be conspicuous: place your Terms and Conditions somewhere noticeable.
- Consider a clickwrap agreement: have users actively consent before continuing.
- Cover changes to the contract: explain how you’ll notify users of updates.
The information in this article is for informational purposes only and should not be construed as legal advice on any matter, and does not create a lawyer-client relationship.
