Reducing friction in the contracting process
Organisations always want a faster, smoother way of doing everything.
Click-wrap contract terms are the terms of business we all know well from signing up for software online: “Check the box to accept our terms of business”.
For suppliers, click-wrap terms compound the benefits of swift contracting and the psychological pressure to accept the contract’s terms without amending them.
The recent case of Parker-Grennan v Camelot UK has confirmed that click-wrap is a perfectly effective way of presenting contract terms leading to a legally binding outcome.
This post sets out some high-level considerations for deciding how to present your click-wrap terms.
Options
There are myriad ways your contract terms can be presented, from a full contract with a ‘wet ink’ signature at one end of the spectrum, to ‘browse-wrap‘ at the other.
Click-wrap is appropriate for situations where you are not expecting your contract to be negotiated and want a quick and easy route to acceptance.
A typical alternative is a hybrid approach with a hard copy order form referencing online terms. This hybrid approach allows for a signature (physical or digital) and can provide for exceptions to the standard contract terms, where necessary.
Click-wrap – what you need to be able to show
You will want to ensure that the click-wrap terms bind your organisation and your counterparty, which requires that:
- The terms have been accepted (the ‘I accept’ button)
- It is clear when and by whom the terms have been accepted
- There is a record of the contract version that was in force when the terms were accepted
Signing authority
Where your counterparty is a corporate entity, you will need some basis for assuming that the signatory has authority to sign.
As a minimum, capture the name of the individual who clicks the ‘I accept’ button and, depending on the importance of the contract, you may wish to present the option to click and bind their companies only to individuals who have been authorised, or to check this after the fact and rely on your terms to unravel the contract, if necessary.
Drafting your terms
Having gone to all the trouble to create your click-wrap mechanism, you will want people to use it.
Some people and organisations will sign just about anything – others won’t. In order to make your terms acceptable to most users, you will want to make them as reasonable and balanced as possible – there are also statutory requirements to do so.
Depending on your circumstances (for example, any regulatory obligations to perform checks such as ‘know your business’ compliance) you may wish to stipulate that the contract will only have limited effect until the counterparty is fully onboarded.
About Clearlake
Clearlake Law provides fractional legal services to organisations across multiple technology sectors doing business in the United Kingdom.
Please feel free to reach out directly to the author of this post, Katherine Kennedy, on katherine.kennedy@clearlake.law or 0204 570 8741.
