WHAT IS “CLICK-THROUGH” CONTRACTS

Click through agreements also known as ‘click and accept’, ‘web-wrap’, ‘click-wrap’, ’shrink-wrap’, ‘sing-in-wrap’ agreements which offer over the Internet all possible protections which are more useful than any affordable intellectual property rights to companies selling goods and services. These agreements are enforced to disclaim implied warranties, choose the governing law, limit liability and forum for resolving disputes, and restrict any reverse engineering. In both the category of business transactions that is B-to-B and B-to-C transactions, e-shoppers have become very used to familiar with screens flashing legal terms of the service provider and requiring to click on "I accept" button before goods and services can be ordered or procured or information be delivered and allowed to be accessed. Problems are faced when a company enters into a click-through agreement.

WHAT IS “CLICK-THROUGH” CONTRACTS

INTRODUCTION:

Click through agreements also known as ‘click and accept’, ‘web-wrap’, ‘click-wrap’, ’shrink-wrap’, ‘sing-in-wrap’ agreements which offer over the Internet all possible protections which are more useful than any affordable intellectual property rights to companies selling goods and services. These agreements are enforced to disclaim implied warranties, choose the governing law, limit liability and forum for resolving disputes, and restrict any reverse engineering. In both the category of business transactions that is B-to-B and B-to-C transactions, e-shoppers have become very used to familiar with screens flashing legal terms of the service provider and requiring to click on "I accept" button before goods and services can be ordered or procured or information be delivered and allowed to be accessed. Problems are faced when a company enters into a click-through agreement. In such cases, the service provider or the vendor must ensure that the person clicking to accept button for agreeing to the terms and conditions of the service provider is a person who is authorized to accept on behalf of the company. The Companies offering goods and services electronically over the Internet cannot assume that all the "click-through" contract’s terms will always be properly enforced. But with advance planning and adjustments after learning and gaining experiences from different cases, such companies can increase their prospects for enforcing the terms of those agreements in their major markets.

“CLICK- THROUGH” CONTRACTS:

In general terms, clickwrap agreements are an online agreement according to which the user signifies his or her acceptance by clicking on a button or checking a box which says “I agree” signifying their acceptance. The aim of a clickwrap agreement is to digitally capture acceptance for a contract between the service provider and the consumer. They allow companies to enter into a contract with customers without negotiating any terms or conditions with each. For a click-through contract to be enforceable and be considered legitimate, the contract must:

  1. Be reasonably visible to all users;
  2. Consist of active, affirmative consent;
  3. Be easily understandable by the average user;
  4. Be enforceable by law.

CLICKWRAP AGREEMENTS IN INDIA:

The Indian Contract Act,1872 states that an agreement which is enforceable by law is a contract. The Indian Contract Act of 1872 has not been amended according to the latest requirements set according to which it should include the scope of Electronic Agreements or Click-wrap Agreements. The Supreme Court of India gave an important decision in Trimex International FZE vs Vedanta Aluminum Limited, India, 2010 (1) SCALE 574 case and held that if the terms of a Contract are decided or discussed over the email, such emails are to be constituted to be a valid part contract and hence are enforceable. Through this case, the Supreme Court acknowledged the validity of electronic contracts even if they are not electronically signed or registered. Later in the case of LIC India vs. Consumer Education and Research Centre the Supreme Court of India held that when a contract is of a nature that it can be stated to be an Adhesion Contract and when the parties to the contracts do not have equal bargaining power, then in such cases with respect to Article 14 of the Constitution of India the Supreme Court shall strike an unfair or unreasonable contract. It can be observed that the Indian Courts have acknowledged the acceptance of electronic contracts in Indian contracts but this is not just a blanket acceptance. The courts are planning to go deeper into the contents of the contract, the bargaining powers of the parties to the contract and the terms and conditions of the contract to decide upon its validity.  The most important and relevant precautionary measure would be to read the contents of the agreement. The entire agreement might not be read completely, but it is essential to look into the matters and content of the agreement to understand what all data is to be shared with or by the other party and to clarify that are there any third parties involved etc. The number of clickwrap agreements is executed daily worldwide based on this they are done by any person hence it is not possible to read, study and analyse every single agreement. The contracts which are made for high priority tasks such as creation or start of an online bank account, purchasing of any expensive goods and services online need to be read and understand prior to accepting them. It is a common trend that must be followed and most of the contracts include a clause for arbitration. Such clauses can in various situations be considered to be unconscionable based on the fact that the party to the contract with a lesser bargaining power has no or not enough means to travel to and attend the proceedings in another country. Such terms should be mentioned while contending that the contract is highly biased.

USES CASES FOR CLICKWRAP AGREEMENTS:

Most of the Online users go through clickwrap agreements regularly. These agreements have become a very significant part of virtual dealing and are as necessary as providing good services. The examples of Click- Wrap agreement includes:

  • Asking users of the website to accept that the website uses cookies.
  • Asking users to Complete an online registration form.
  • Asking users to install a mobile app.
  • Asking users to Purchase a cloud service.
  • Asking users to Connect to a wireless network.

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CLICKWRAP AGREEMENTS IN EYES OF LAW:

Clickwrap contracts are mostly used in the cases where the same boilerplate contracts are offered or signed an uncountable number of times. Common uses such agreement include contracts that support online privacy policies or terms and conditions for accessing as a member of protected website content. It is a most suited to call the existence of such contract through a pop-up window that has a checkbox or acceptance guide and contains the speech of acknowledgement stating “I agree to the terms and conditions of the service which I am willing to vail.” Or they may differ from case to case. There also is a hyperlink always present which directly leads to a webpage that contains the documents of the full agreement the user is accepting. Mostly clickwrap agreements are made and never talked about or thought of again. If the terms of the contract are violated or any infringement takes place then there can be serious legal and financial consequences for such actions by any party to the contract. Terms and conditions of the click-through agreement are ones in which the user agrees to all of them and a browse-wrap agreement does not require the user to specifically agree to any the terms and conditions.

Click-through agreements are the most preferred method for making any contract enforceable through any online mode of services from any website or mobile app. They are recognized by several courts as being valid and enforceable contracts because the user has agreed to and provided explicit assent. But most of the times courts have been hesitant and reluctant to enforce browse-wrap agreements.

CASE STUDY:

LIC INDIA VS CONSUMER EDUCATION AND RESEARCH CENTER AND ORS. (1995 AIR 1811)

According to Section 2(11) of the Insurance Act, 1938 the life insurance business is defined. Life Insurance Corporation of India (LIC), is a state-owned insurance company. The company offered the market with its cheapest life insurance policy, named as “Table 58”. It was offered only to “the people who are part of Government or quasi-Government organisation or a reputed commercial firm”, hence resulting in excluding the new policy from the reach of most people. The new policy was challenged in the Gujarat High Court, on the basis of Article14, 19(1)(g), 21 and 226 of the Constitution of India. The High Court held that the clause about obtaining assurances only from persons in Government or quasi-Government organisation or a reputed commercial firm which can be used for furnishing details of leave taken during the preceding year under the new policy as subversive of equality and, hence this new policy is constitutionally invalid.

 

BY- GAURAV GUPTA