Click wrap Agreements And Their Enforceability

Click wrap agreements are contracts between a service provider and an online user in which the user must agree to the terms and conditions of the service provider before utilizing any website or programme. Before installing software or using a website, a user must click on a box or button in the Click wrap Contract. The Click wrap Contract is based on Shrinkwrap Contracts, in which the TOS [Terms of service ] is included with the item and opening it is deemed entering into a Shrinkwrap contract. This blog will provide an outline of what a Click wrap contract is and how they are enforced.

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Click wrap agreements: Nature and Significance

A popular sort of digital contract is a Click wrap contract. It’s a contract between a customer and a business. Before downloading anything, making a transaction, or using a website, a user must first click a box or button.

Companies in today’s digital environment rely heavily on Click wrap Contracts. This type of contract is noticeable in B2C industry, and the Click wrap License was created as a result of a huge quantity of footfall for one specific product or website. While Click wrap Contracts are quicker to implement and less time intensive, they also have the following advantages:

1. Click wrap Contracts are integrated into websites and can be seen and downloaded directly.
2. Click wrap Contract allows businesses to enter into contracts with several users at the same time without having to negotiate.
3. It enables businesses to save electronic signatures and add extra provisions without the need to consult users.
4. They can be utilised in other types of contracts in addition to software applications.
5. Click wrap Contracts can be used between employers and employees as well as between companies and third parties.

How are Click wrap agreements enforced?

Many international organizations have certified online contracts, including the United Nations Commission on International Trade Law (UNCITRAL) and the Conventions on Contracts for the International Sale of Goods (CISG). The Uniform Computer Information Act (UCITA), which legitimizes online contracts, also approves them. So, in comparison to India, the legal condition of internet contracts in other countries such as the United States, European nations, the United Kingdom, and so on is relatively clear based on these set laws.

Another noteworthy case is Hotmail Corporation vs. Van$ Money Pie Inc.(Cal. April 20, 1989), which was one of the first to confirm the legitimacy of the click wrap agreement in its judicial interpretation. The plaintiff (Hotmail) claims that the customer broke the terms of the agreement by altering the messages and e-mails. The plaintiff claimed that the defendant had violated the Computer Fraud and Abuse Act, as well as breach of contract, fraud, misrepresentation, and chattel trespass. When it comes to comprehending the judicial interpretation of click wrap agreements, the enforceability of the agreement is determined by the terms and circumstances. The plaintiff won the case because the terms and circumstances of the click wrap agreement were not followed.

Feldman v. Google, Inc. – 513 F. Supp. 2d 229 (E.D. Pa. 2007)

While upholding the Click wrap Contract’s enforceability, the court cited “reasonable notice of the terms and manifested acceptance to the Contract.” The court concluded that there could be no purchase without agreeing to the terms and conditions of the Contract while purchasing the advertisement “Adwords” programme, despite Plaintiff’s claim that he did not enter into any form of contract with the defendant.

Specht v. Netscape Communications Corporation, 306 F.3d 17 (2d Cir. 2002)

In this instance, the court determined that Click wrap Contracts are only enforceable when they are plainly and prominently posted on the website, but Netscape posted the Contract in an unobtrusive manner.

Bragg v Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. Pa. 2007)

The court found that, while the Contract’s form was sound, Linden Research took advantage of the “exploited uneven negotiating power” by drafting onerous, unacceptable provisions.

Above mentioned case outline that Click wrap Contracts are internationally enforceable in a court of law.

Position in India

There are no explicit principles in India to deal with internet contracts directly; nonetheless, these are dealt with in relation to traditional contract laws, such as Section 10 of the Indian Contract Act, 1872, because consumers are obligated to follow the consequences after expressing agreement. In India, contracts are considered legally valid or invalid based on the provisions of various statutes such as the Indian Evidence Act, 1872, Indian Penal Code, 1860, Reserve Bank of India Act, 1934, and Bankers Books Evidence Act, 1891, to make them compliant with the online contract by the IT Act, 2000.The Indian Parliament enacted the Information Technology Act of 2000 to include online contracts in its scope. To deal with online contracts, this act is based on UNCITRAL’s Model Law on Electronic Commerce, 1996.

LIC India V. Consumer Education and Research Centre, 1995 AIR 1811

In this case, the Supreme Court of India discussed the extent to which it may intervene in a contract if the parties had uneven negotiating power. The Supreme Court held that when a contract is of such a nature that it can be described as an adhesion contract, and when the parties to the contract do not have equal bargaining power, the Supreme Court shall strike the contract as unfair or unreasonable under Article 14 of the Indian Constitution (guaranteeing equal protection of the law to its citizens).

Trimex International FZE v. Vedanta Aluminium Limited ((2010) 3 SCC 1)

The court concluded in this instance that if the parameters of a contract were discussed by email, the emails formed a legitimate contract and were thus enforceable.

Ddit(ltd) Mumbai v. Gujarat Pipavav Port ltd. (2017-LL-0210-119)

The Income Tax Tribunal ruled in this instance that unconscionable or unreasonable bargain (contract adhesion) in mass contracts such as Shrinkwrap and Click wraps renders them unenforceable, despite the fact that they have all of the elements of a legitimate contract.

The above-mentioned case laws clearly show that Click wrap contracts are enforceable in court, but their enforceability is mostly determined by whether or not the permission was given freely and actively. While all Click wrap contracts can be enforced in court if they meet all of the requirements for a legitimate contract, it is clear that this type of contract has received more international repercussions than in the Indian scenario.

Conclusion

The legal legitimacy of Click wrap Contracts can be seen all over the world, with countries such as the United States, the United Kingdom, and countries in Europe having statutes expressly dealing with them, however their legal validity in India has yet to be explored. With the rise in online use of such contracts, Indian regulations have fallen short in regulating them. It would be beneficial for internet users if these contracts were included in our current Information Technology Act or if relevant statutes pertaining to these online software contracts were enacted. A statutory sanction not only makes it lawful, but it also protects the service provider from exploitation, which in this case would be unconscionable bargaining power (contracts of adhesion).

Author: Anuja Saraswat- a student of  NMIMS Kirit P. Mehta School of Law (Mumbai),  in case of any queries please write back us via email at support@ipandlegalfilings.com or contact us at IP And Legal Filings.