The general rule is that acceptance of terms included in online, click wrap or shrink wrap elements is valid and effective, provided such acceptance is clearly stated and applies to terms that were known to the person giving the acceptance. However, several rules may limit the effects of agreements entered by these mechanisms, particularly consumer protection rules and rules on adhesion contracts.
Key commercial contract considerations
Enforceability of online/clickwrap/shrinkwrap terms
These types of terms and contracts are enforceable provided they are validly made, which includes ensuring that the users are made aware of (and, ideally, actively and explicitly accept) the terms of the contract prior to purchase or use of online services.
Online terms which are in line with the E-Commerce Act (and, if applicable, the Consumer Protection Act) are recognized and fully enforceable. In accordance with consumer protection laws, consumers are usually entitled to revocation of the contract. A notification regarding the revocation right and the respective template for revocation should be set forth in separate documents (not in the terms and conditions).
The enforceability of shrinkwrap terms is severely disputed under Austrian and EU law. This is due to the provisions of Austrian law stating that a contract should be finally concluded before it is executed, and most shrinkwrap agreements do not meet this standard. In addition, under EU law the Rome I and Brussels I regulations also affect this issue and in some cases limit the applicability of shrinkwrap licenses.
In order to enforce online general terms and conditions (including online or clickwrap terms), (i) the contractual provisions must be made available to the other party in such a way that he or she can store and display them; (ii) the other party must have been aware and have consented to the content of the terms; and (iii) a written mention of the other party accepting the terms can be given by any means which guarantees that the mention came from that party.
Online agreements are generally considered enforceable if they are clearly available for the user's review. There is no specific law requiring that the user needs to indicate affirmative assent (eg, separately "check a box") to confirm his or her acceptance to the content and provisions of the agreement. Considering the current lack of specific legislation, the general rules of contracts apply. For instance, if the law does not require express acceptance, such acceptance may be tacit. Therefore, the act of using the services or purchasing the goods may be deemed a tacit acceptance.
It is important to stress that the use of "adhesion contracts" (ie, a written agreement drafted by one of the parties and which, in principle, cannot be amended by the other party) is allowed under Brazilian law. However, owing to their nature, the law and the courts tend to protect the party in the weaker position (ie, adhering party). Brazilian courts may disregard a contractual provision if such provision is deemed abusive (eg, if it contains a waiver of a right by the adhering party).
Generally speaking, clickwrap/shrinkwrap terms have been enforced applying general contract principles. However, it is important to note that several provinces, including Ontario, Québec and Alberta have legislation that limits the effect of arbitration clauses in consumer contracts, and that permits a consumer to bring an action, including a class action, notwithstanding an arbitration clause.
Online, clickwrap and shrinkwrap agreements are generally viewed as enforceable if they are conspicuous and users have an opportunity to review and indicate affirmative assent.
Online/clickwrap/shrinkwrap agreements are generally enforceable.
Online, clickwrap and shrink-wrap agreements are generally recognized by Colombian law and are enforceable if they are conspicuous and users have an opportunity to review and indicate affirmative assent.
Generally viewed as enforceable if conspicuous and users have an opportunity to review and indicate affirmative assent (eg, check a box).
Online terms are generally viewed as enforceable if conspicuous and users have an opportunity to review.
Companies offering services online need to make terms available in a way, which makes it possible to save and retrieve them according to the Act of E-commerce (227 22/04/2002).
In business-to-consumer relations, specific rules apply.
In B2B context, online terms are generally considered enforceable, provided that they have been accepted and available to the other party upon contracting. Even a link to applicable online terms may suffice to make them enforceable, provided that the other contracting party has had a sufficient and actual chance to become acquainted with the terms upon contracting and that these online terms do not include surprising and strict terms or conditions. If the online terms include surprising and/or strict terms or conditions, these strict terms or conditions need to be separately specified and informed to the other party.
In the B2C context, several limitations apply due to consumer protection legislation.
Online terms are generally viewed as enforceable if conspicuous, and users have an opportunity to review and indicate affirmative assent (eg, check a box).
The incorporation of online and click-wrap general terms and conditions into a contract is generally possible. However, it is debated whether shrink-wrap terms and conditions can validly be incorporated. It seems to be quite clear that the purchaser does not have an opportunity to take note of the contract text and the terms before the contract is concluded and the protective cover is opened.
Online terms are generally viewed as enforceable if conspicuous, users have an opportunity to review and indicate affirmative assent (eg, check a box).
Generally viewed as enforceable if conspicuous, users have an opportunity to review and indicate affirmative assent (eg, check a box).
Online terms are generally viewed as enforceable subject to compliance with Indian contract law, and the IT Act. Users must have an opportunity to review and indicate affirmative assent (eg, check a box) to contractual terms.
Online transactions via an electronic contract are generally binding upon the parties. The online offeror must make available complete and true information about the terms, producer and products offered in the online transaction.
The enforceability of online terms is determined in Ireland by their compliance with normal principles of contract and consumer law, rather than by their medium.
The Unfair Contract Terms Directive, 1993/13/EEC was implemented in Ireland under the the European Communities (Unfair Terms in Consumer Contracts) Regulations, S.I. No. 27 of 1995 (as amended). This applies to the content of online/ click wrap/ shrinkwrap contracts in a business to consumer context and contains provisions in particular in respect of the types of contract terms which may be regarded as being unfair. A contract which contains unfair terms risks being unenforceable against the consumer.
In addition, the European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 require that certain minimum content is included in order for the contract to be enforceable.
Online terms are generally viewed as enforceable under Israeli law, subject to aspects involving there being a standard contract, as further discussed above.
Nevertheless, when entering into an agreement that is reviewed and signed online, companies should ensure that the signer has the opportunity to review the terms of the agreement beforehand and that the signer provides his or her consent to the agreement (such consent should be retrievable for evidentiary purposes), subject to the restrictions set forth in the Standard Contracts Law, as further discussed above.
It should be noted that in some decisions of the Israeli district courts (which are not binding case law, but rather guidance for lower courts), it has been ruled that the courts' tendency will be to revalidate online agreements when the signer provided active consent (clickwrap agreements), as opposed to shrinkwrap (or browserwrap) agreements, where the active consent of the signer is not required.
The following considerations should be taken into account when entering into an online contract, especially in case of clickwrap and shrinkwrap terms.
Pursuant to Section 1341 of the Italian Civil Code, in case of standard terms and conditions drafted by one party, some provisions would be enforceable against the party who did not have the chance to negotiate the contract solely if specifically accepted in writing by the latter though the so called "double signature". In particular, the Italian Civil Code identifies as restrictive clauses the provisions which
- Limit the liability of the party who prepared the terms and conditions
- Give said party the right to withdraw from the contract or to suspend the execution thereof
- Burden the other party with time limits for the exercise of a right or limitations of such party's power to raise defenses or with restrictions on freedom of contract with third persons, or with tacit renewal of the contract
- Provide for arbitration or derogations from the normal venue or jurisdiction of the courts
In B2C contracts, the clauses which are set by the vendor with no negotiation and which determine a consistent imbalance for the consumer shall be considered "restrictive clause" and therefore void. Where said clauses are the result of a negotiation between the vendor and the consumer, such clauses shall be considered effective provided that they
- Do not exclude or limit the liability of the vendor in the event of death or injury to the consumer due to an action or omission of the vendor
- Do not exclude or limit the consumer's power to raise defenses in case of non-fulfillment or inadequate fulfillment of the vendor's obligations
- Result in the acceptance of clauses that the consumer could not examine before the conclusion of the contract
Online terms are generally considered enforceable if conspicuous and users have an opportunity to review terms in advance.
Under guidelines on e-commerce promulgated by the Ministry of Economy, Trade and Industry, changes of terms of service or use should be appropriately disclosed in a way that users can easily be aware of the changes.
The Electronic Contract Act (Act No. 95 of 2001) allows a consumer who had erroneous operation of a computer (eg, accidental click) to cancel the contract if the company does not take appropriate measures (eg, easily understandable order confirmation display) for the consumer to reconfirm the details of the order before the final click.
When a contract is drafted by one party and the other party merely has the opportunity to accept it (ie, the contract is not negotiated), some provisions must be specifically approved in writing by the other party in order to be enforceable against the party that has not drafted the agreement. Such provisions include those relating to limitation of liability, time limits, exclusivity, withdrawal rights and choice of venue.
For contracts approved online, it is a common practice to contemplate a second check box to specifically approve the relevant clauses. However, such second tick is not deemed sufficient and consequently there is the risk that users challenge the enforceability of the provisions mentioned above while the other terms of the contract will remain valid.
Online terms are generally viewed as enforceable if conspicuous, users have an opportunity to review and indicate affirmative assent (eg, check a box).
In order to be enforceable, the customer must have accepted the terms, usually by ticking a box, and a copy of the terms must be provided or made available. The obligation to provide a copy of the standard terms means that the user has to afford the other party a reasonable opportunity to review and accept the standard terms. The user has afforded the other party this opportunity when he has handed over the standard terms to the other party at the time of entering into the contract. This obligation will be satisfied in an online environment if the standard terms were made available to the consumer either prior to or upon concluding an agreement in such a manner that the consumer could download them and save them on his own data carrier (eg, hard drive, USB stick), since the other party must also be able to refer to them at a later point in time. Including a link to a website is not sufficient.
Information is not denied legal effect solely because it is in electronic form or is an electronic communication. Therefore, online, clickwrap and shrinkwrap agreements are generally enforceable, provided that they are validly made (including giving appropriate notice of terms and conditions).
However, traders must also be mindful of the statutory rights of consumers as well as fair trading requirements, as these may impose additional terms and/or render some terms unenforceable.
Online terms are generally viewed as enforceable if conspicuous and users have an opportunity to review and indicate affirmative assent. This can for example be done through a check box.
Companies offering services online need to make terms available in a way which makes it possible to save and retrieve them according to the E-commerce Act.
In a business-to-consumer situation, specific rules apply.
Online and clickwrap general terms and conditions are enforceable. However, if written form is prescribed by law (eg, agreements on the transfer of an author's economic rights must be in written form), the document must be signed with handwritten signatures. Therefore, such agreements cannot be concluded as clickwrap terms and conditions. The enforceability of shrinkwrap terms is less clear, especially with regard to the business-consumer relationship.
Online terms are, in principle, enforceable in cases where the legal requirements applicable to the agreement are met.
Online, clickwrap and shrinkwrap agreements are generally viewed as enforceable if they are conspicuous and users have an opportunity to review and indicate affirmative assent (such as through checking a box). However, unusual clauses (such as limitation of liability clauses or clauses containing the right to unilaterally terminate the contract or to suspend the performance of the obligations and the like) must be expressly accepted in writing in order to be enforceable.
There is still no established practice on acceptance/enforceability of online terms. In most cases, however, such online terms should be deemed binding if accepted by the addressee (eg, by click method), and such accepting party can be identified in case of dispute.
The enforceability of online terms (including whether the user has given appropriate consent to such terms) should be reviewed on a case-by-case basis.
Online/clickwrap/shrinkwrap contracts are generally enforceable in Singapore. Online transactions are regulated by the Electronic Transactions Act (Cap. 88). This sets out the legislation surrounding the formation of contracts through online and electronic means and enforceability of these contracts.
Not applicable for this jurisdiction.
The Electronic Transactions Basic Law (ETBL) stipulates that an electronic document shall not be denied its validity only because it takes an electronic form, unless otherwise provided in other laws.
Nor is there any law that restricts the effectiveness and enforceability of a contract in an online form.
For standardized contracts which we understand will be the case for most agreements executed via a web interface, the validity and effectiveness of such agreements will depend on meeting the requirements of the STCA. There is no black-letter law on what would be an acceptable form in an on-line setting to satisfy the foregoing requirements. However, it is widely accepted that a mere posting of the contract and its terms and conditions on a website would not be sufficient. Commonly used methods to meet this requirement include the posting of the online contract with an "I accept" button at the end (which can be clicked only if the counter-party had scrolled the screen to the bottom) or having a pop-up window show up with an explanation of the major terms and conditions and then having the other party click an "I understand" button.
Generally viewed as enforceable if conspicuous, users have an opportunity to review and indicate affirmative assent, eg, check box.
The LSSI regulates electronic contracts, although the Spanish Civil Law must be also taken into account. The LSSI further obliges service providers to provide information in a clear, understandable and unambiguous way regarding the conclusion of the contract. Electronic contracts will have the same legal effects, provided that the consent and other legal requirements that is object and cause have been satisfied.
Online terms are generally viewed as enforceable if conspicuous and users have an opportunity to review and indicate affirmative assent (eg, check a box).
Companies offering services online need to make terms available in a way which makes it possible to save and retrieve them according to the Act on E-Commerce.
In a business-to-consumer situation, specific rules apply.
Shrinkwrap terms are not valid. The terms of the license must be made available to the consumer before the opening of the package.
Online and clickwrap terms are enforceable if they are visible, easily available and phrased clearly.
Generally speaking, online is deemed one of the ways, tools or media for entering into agreement and online terms/click wrap/shrink terms are also generally enforceable – provided, however, that, according to the Consumer Protection Act, more obligations are imposed upon suppliers/sellers online, compared to offline transactions, such as:
- Certain information must be clearly and conspicuously provided in writing in advance
- Suppliers/sellers shall provide consumers with information that they are entitled to return the products within 7 days without any cause and suppliers/sellers are responsible for all expenses and costs for such return
- When consumers notify suppliers/sellers of rescinding the contract in writing, suppliers/sellers shall retrieve the goods within 15 days, unless the parties have agreed otherwise
- Consumers shall not be responsible for keeping custody of any unsolicited goods
Ukrainian legislation does not distinguish such forms of agreements as online, clickwrap or shrinkwrap agreements (or terms). Formally, the agreements concluded according to the requirements of the E-Commerce Law (presumably, online or clickwrap agreements) are deemed enforceable. Additionally, the law established that the validity of the electronic document cannot be denied solely due to the electronic form of the document. However, in practice such forms of agreements may be rejected by controlling authorities. For example, state authorities require that the software licences must be provided in a written form to duly confirm the rights of the Ukrainian legal entities to use relevant software.
United Arab Emirates
Article 12 of the Copyright Law provides that the assignment of rights to commercial exploitation pertaining to computer software, its applications or databases, shall be subject to the licensing agreement associated or attached to the program, whether appearing on the supporting bar or upon downloading or saving the program. The buyer or user of the program shall be bound to abide by the terms set out in the said agreement.
The legal enforceability of shrinkwrap terms has historically been somewhat debated by academics (though common commercial practice). The Consumer Rights Act 2015 now sets out a consumer's rights and obligations under business-to-consumer supply contracts for digital content (business-to-business being out of scope). Consumers now have statutory rights against the business supplier regarding the quality and title of digital content supplied, whether that be downloaded online or supplied as part of physical goods such as DVDs and CDs.
There are a number of requirements which relate to online terms which govern transactions entered into or services provided over the internet. For example, the Electronic Commerce (EC Directive) Regulations 2002 and Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 set out details of the information that must be provided by the trader.
Certain information regarding the new European Online Dispute Resolution platform must now also be provided by online traders on their website and in their terms, if that trader is statutorily obliged to use this alternative dispute resolution procedure.
Online, clickwrap and shrinkwrap agreements are generally viewed as enforceable if they are conspicuous and users have an opportunity to review and indicate affirmative assent, eg, check a box.