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Browse wrap agreement: Top 7 secrets

browse wrap agreement

Browse wrap agreement

A properly drafted browse wrap agreement can help a business ensure its website online terms and conditions are enforceable. In 2014 many businesses operate and transact solely online. It is therefore becoming extremely common for websites to use electronic terms and conditions of use and sale rather than written contracts. However, courts have consistently held that the usual laws of contract formation and enforceability of contracts still apply to website terms of use presented to visitors.

1. Difference between click wrap agreement and browse wrap agreement

In a click wrap agreement the visitor to the website has to take some form of action to show their consent to the presented terms and conditions. The website usually achieves this by requiring the visitor to check a box placed beside a statement that the visitor has read and accepts the terms and conditions.

Conversely, in a browse wrap agreement the terms and conditions are typically posted somewhere on the website and accessible by a link appearing on various pages on the website, or a permanent link anchored at the bottom of the website.

The important difference between click wrap and browse wrap agreements is that with browse wrap there is no requirement that a website visitor takes any affirmative action to indicate its assent to the terms and conditions. Click wrap and browse wrap agreements are almost ubiquitous in online commerce. Many countries have laws that aid the enforceability of both types of agreements. For example, in Australia the Electronic Transaction Acts 1999 (Cth), provides that transactions are not invalid because they took place wholly or partly by means of electronic communications.

2. Recent US case is a game changer

The recent case in California of Nguyen v. Barnes & Noble Inc held that, generally speaking, if a website only provides a hyperlink to its terms of use that link is not enough to make the terms enforceable. Following this judgement, businesses in the US may have to re-think how they accomplish obtaining acceptance of terms and conditions in a way that legally bind visitors. The court in Nguyen indicated that a link to terms and conditions should explicitly and conspicuously warn the visitor that use of the website will constitute assent to a binding contract. The link and warning should be in close proximity to a button or link that the visitor must ‘click’ on to take action.

3. Warning – browse wrap has risks

Browse wrap agreements don’t incorporate a step where the visitor has to ‘click’ to agree to the terms. Many businesses do not want to incorporate this step for technical or aesthetic reasons. A risk with this approach is that if a purchaser must pay for a product before a browse wrap agreement is presented for acceptance, the agreement may face enforceability issues. Most browse wrap agreements have further enforceability issues as, depending on the design of the website, visitors may not even be aware that terms apply to their use of the site and may happily continue to use the site and download content without actively viewing or agreeing to those terms.

4. Don’t hide your terms under a bushel

In Nguyen it was accepted by both parties that the visitor genuinely had no knowledge of the existence of Barnes & Nobles browse wrap agreement terms. In cases like this, businesses should be aware that the enforceability of the browse wrap agreement depends on whether the disclosure of the agreement on the website is sufficient to put a “reasonably prudent” person on notice of the terms and conditions. This will be a question of fact based on the design and content of the website. If the link to the terms and conditions is buried at the bottom of the webpage or hidden away in an obscure part of the website, that is not likely to be sufficient notice.

5. Most important thing to remember if you wish to use browse wrap

Given that the validity of a browse wrap agreement depends on whether the visitor has actual or constructive knowledge of the website’s terms and conditions, website owners must take action to ensure that visitors or potential purchasers are made aware as early as possible that use of the website and any transaction is subject to the terms of the relevant browse wrap agreement. Nguyen highlighted the fact that courts have consistently enforced browse wrap agreements where the individual had actual notice of the agreement.

6. Which is better for my business to use: browse wrap agreement or click wrap agreement?

Accordingly, I tend to advise my clients to use click wrap agreements on their website where feasible. Due to the active method of acceptance it is easier to argue the enforceability of click wrap agreements over browse wrap agreements. In other words, it will be easier to argue that the agreement is valid if users have the opportunity to review the terms and indicate their affirmative consent before they use or purchase the relevant online product or service.

7. Click ‘accept’ or become a member

Following the court’s reasoning in Nguyen, judges will be more willing to enforce browse wrap agreements where the browse wrap agreement resembles a click wrap agreement. This means your website should require the visitor to affirmatively acknowledge your terms of use in some way. This could be by indicating their acceptance of the website’s terms and any terms applying to the relevant transaction by clicking a button or checking an appropriate box before they are allowed to view the homepage or enter into any transaction through the site. An alternative approach is to require visitors to sign-up to the website as a member (involving acceptance of a click wrap agreement) and log into your website before being provided with any services or important website content.

© Mark Adair

Photo credit: Pixabay

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