Clickwrap
Encyclopedia
A clickwrap agreement
(also known as a "clickthrough" agreement or clickwrap license) is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet
, as part of the installation process of many software packages, or in other circumstances where agreement is sought using electronic media. The name "clickwrap" came from the use of "shrink wrap contracts" commonly used in boxed software purchases, which "contain a notice that by tearing open the shrinkwrap, the user assents to the software terms enclosed within".
Click-wrap is the electronic equivalent of the shrink-wrap
method which allows users to read the terms of the agreement before accepting them. The click-wrap method was presented to the court in ProCD v. Zeidenberg
, 86 F.3d 1447 (7th Cir. 1996), where Zeidenberg purchased a CD-ROM, created by ProCD, which contained a compilation of a telephone directory database. Upon purchase of this CD-ROM, Zeidenberg installed the software onto his computer then created a website which offered to visitors the information contained on the CD-ROM at a price less than what ProCD charged for the software.
Prior to his purchase of the software, Zeidenberg may not have been aware of any prohibited use or dissemination of the product without consent by ProCD. However, upon preparing to install the software onto his computer, the software license appeared on his computer screen and would not allow him to continue with the installation without indicating acceptance by clicking his assent in a dialog box.
The court held that Zeidenberg did accept the offer and the terms contained within the license by clicking through the dialog box. Zeidenberg had the opportunity to read the terms of the license prior to clicking the acceptance box. The court further stated that Zeidenberg could have rejected the terms of the contract and returned the software. (Id.).
The content and form of clickwrap agreements vary widely. Most clickwrap agreements require the end-user
to manifest
his or her assent
by clicking an "ok" or "agree" button
on a dialog box
or pop-up window. A user indicates rejection
by clicking cancel or closing the window. Upon rejection, the user cannot use or purchase the product
or service. Classically, such a take-it-or-leave-it contract was described as a "contract of adhesion, which is a contract that lacks bargaining power, forcing one party to be favored over the other".
The terms of service
or license do not always appear on the same webpage or window, but are always accessible before acceptance, such as through a hyperlink
embedded in the product's webpage or a pop-up screen prior to installation. In order to be deemed to have accepted the terms of service, the purchaser must be put on notice that certain terms of service may apply. If the terms of service are not visible and/or accessible, courts have found the notice requirement to be lacking and as such, the purchaser may not be bound to the terms of the agreement.
It should be noted however that even though courts have ruled some clickwrap licenses to be enforceable contracts, it does not follow that every term of every clickwrap license is enforceable. Clickwrap licenses must still meet the criteria for enforceability of a unilateral form contract.
database. Verio responded that the terms were not binding since users could access the database with or without expressing consent to the terms. The court ruled in favor of Register.com, holding that contractual relationships could be formed whether or not users are required to express assent prior to using a product or service.
An earlier case, Specht v. Netscape Communications Corp.
, 150 F.Supp.2d 585 (S.D.N.Y. 2001), aff'd, 306 F.3d 17 (2d. Cir. 2002), gave perhaps the clearest definition of a clickwrap license.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
(also known as a "clickthrough" agreement or clickwrap license) is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
, as part of the installation process of many software packages, or in other circumstances where agreement is sought using electronic media. The name "clickwrap" came from the use of "shrink wrap contracts" commonly used in boxed software purchases, which "contain a notice that by tearing open the shrinkwrap, the user assents to the software terms enclosed within".
Click-wrap is the electronic equivalent of the shrink-wrap
Shrink wrap contract
Shrink wrap contracts are license agreements or other terms and conditions of a contractual nature which can only be read and accepted by the consumer after opening the product. The term describes the shrinkwrap plastic wrapping used to coat software boxes, though these contracts are not limited...
method which allows users to read the terms of the agreement before accepting them. The click-wrap method was presented to the court in ProCD v. Zeidenberg
ProCD v. Zeidenberg
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 , is a United States contract case involving a "shrink wrap license". One issue presented to the court was whether a shrink wrap license was valid and enforceable. Judge Easterbrook wrote the opinion for the court and found such a license was valid and...
, 86 F.3d 1447 (7th Cir. 1996), where Zeidenberg purchased a CD-ROM, created by ProCD, which contained a compilation of a telephone directory database. Upon purchase of this CD-ROM, Zeidenberg installed the software onto his computer then created a website which offered to visitors the information contained on the CD-ROM at a price less than what ProCD charged for the software.
Prior to his purchase of the software, Zeidenberg may not have been aware of any prohibited use or dissemination of the product without consent by ProCD. However, upon preparing to install the software onto his computer, the software license appeared on his computer screen and would not allow him to continue with the installation without indicating acceptance by clicking his assent in a dialog box.
The court held that Zeidenberg did accept the offer and the terms contained within the license by clicking through the dialog box. Zeidenberg had the opportunity to read the terms of the license prior to clicking the acceptance box. The court further stated that Zeidenberg could have rejected the terms of the contract and returned the software. (Id.).
The content and form of clickwrap agreements vary widely. Most clickwrap agreements require the end-user
End-user
Economics and commerce define an end user as the person who uses a product. The end user or consumer may differ from the person who purchases the product...
to manifest
Manifest
Manifest has different meanings. It may refer to the following:Arts* Manifest , the Melbourne Anime FestivalBusiness* Manifest Limited, the UK marketing companyComputing...
his or her assent
Assent
Assent can refer to:* A Belgian village between Bekkevoort and Diest.* Offer and acceptance* Royal Assent...
by clicking an "ok" or "agree" button
Button
In modern clothing and fashion design, a button is a small fastener, most commonly made of plastic, but also frequently of seashell, which secures two pieces of fabric together. In archaeology, a button can be a significant artifact. In the applied arts and in craft, a button can be an example of...
on a dialog box
Dialog box
In a graphical user interface of computers, a dialog box is a type of window used to enable reciprocal communication or "dialog" between a computer and its user. It may communicate information to the user, prompt the user for a response, or both...
or pop-up window. A user indicates rejection
Rejection
The word "rejection" was first used in 1415. The original meaning was "to throw" or "to throw back".Rejection may mean:* Social rejection, in psychology, an interpersonal situation that occurs when a person or group of people exclude an individual from a social relationship* Transplant rejection,...
by clicking cancel or closing the window. Upon rejection, the user cannot use or purchase the product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
or service. Classically, such a take-it-or-leave-it contract was described as a "contract of adhesion, which is a contract that lacks bargaining power, forcing one party to be favored over the other".
The terms of service
Terms of service
Terms of service are rules which one must agree to abide by in order to use a service. Unless in violation of consumer protection laws, such terms are usually legally binding...
or license do not always appear on the same webpage or window, but are always accessible before acceptance, such as through a hyperlink
Hyperlink
In computing, a hyperlink is a reference to data that the reader can directly follow, or that is followed automatically. A hyperlink points to a whole document or to a specific element within a document. Hypertext is text with hyperlinks...
embedded in the product's webpage or a pop-up screen prior to installation. In order to be deemed to have accepted the terms of service, the purchaser must be put on notice that certain terms of service may apply. If the terms of service are not visible and/or accessible, courts have found the notice requirement to be lacking and as such, the purchaser may not be bound to the terms of the agreement.
Cases
Few cases have considered the validity of clickwrap licenses. However, in the cases that have challenged their validity, the terms of the contract have usually been upheld.- Feldman v. Google, Inc., 513 F.Supp.2d 229 (E.D.Pa. 2007) (upholding forum-selection clause)
- In re RealNetworks, Inc. Privacy Litigation, No. No. 00-1366, 2000 WL 631341 (D. Ill. May 8, 2000) (upholding an arbitration clause)
- Hotmail Corp. v. Van$ Money Pie, No. 98-20064, 1998 WL 388389 (N.D. Cal. Apr. 16, 1998) (granting preliminary injunctionPreliminary injunctionA preliminary injunction, in equity, is an injunction entered by a court prior to a final determination of the merits of a legal case, in order to restrain a party from going forward with a course of conduct or compelling a party to continue with a course of conduct until the case has been decided...
for alleged breach of contractContractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
for violating the terms of serviceTerms of serviceTerms of service are rules which one must agree to abide by in order to use a service. Unless in violation of consumer protection laws, such terms are usually legally binding...
by using a HotmailHotmailWindows Live Hotmail, formerly known as MSN Hotmail and commonly referred to simply as Hotmail, is a free web-based email service operated by Microsoft as part of its Windows Live group. It was founded by Sabeer Bhatia and Jack Smith and launched in July 1996 as "HoTMaiL". It was one of the first...
account to send spamE-mail spamEmail spam, also known as junk email or unsolicited bulk email , is a subset of spam that involves nearly identical messages sent to numerous recipients by email. Definitions of spam usually include the aspects that email is unsolicited and sent in bulk. One subset of UBE is UCE...
or pornographyPornographyPornography or porn is the explicit portrayal of sexual subject matter for the purposes of sexual arousal and erotic satisfaction.Pornography may use any of a variety of media, ranging from books, magazines, postcards, photos, sculpture, drawing, painting, animation, sound recording, film, video,...
). The court said that clicking the clickwrap button after notice gave consent. - I. Lan Sys., Inc. v. Netscout Serv. Level Corp., 183 F. Supp. 2d 328, 336 (D. Mass. 2002) (upholding a clickwrap agreement on two grounds: first, clickwrap is simply "Money now, terms later" contract formation; second, the court found that the "additional terms" of the clickwrap license was not material under UCCUniform Commercial CodeThe Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
(§207(2)(b)). - Bragg v. Linden Research, Inc., 487 F.Supp.2d 593 (E.D. Pa. 2007) found certain aspects of the Second LifeSecond LifeSecond Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...
clickwrap agreement "unconscionable, and therefore unenforceable." http://pub.bna.com/eclr/064925_053007.pdf - Caspi v. Microsoft, LLC, held a forum selection clause in an online membership agreement was consented to when the user clicked the "I agree" symbol of the agreement in order to proceed with registration.
- In A.V., et al. v iParadigms, LLC, Judge Claude M. Hilton granted summary judgment on the students' complaint in favor of iParadigms/TurnitinTurnitinTurnitin is an Internet-based plagiarism-detection service created by iParadigms, LLC. Typically, universities and high schools buy licenses to submit essays to the Turnitin website, which checks the documents for originality...
, because they had accepted the click-wrap agreement on the Turnitin website.
It should be noted however that even though courts have ruled some clickwrap licenses to be enforceable contracts, it does not follow that every term of every clickwrap license is enforceable. Clickwrap licenses must still meet the criteria for enforceability of a unilateral form contract.
Cases in detail
In Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d. Cir. 2004), Register.com alleged that Verio had breached the terms of use of Register.com's WHOISWHOIS
WHOIS is a query and response protocol that is widely used for querying databases that store the registered users or assignees of an Internet resource, such as a domain name, an IP address block, or an autonomous system, but is also used for a wider range of other information. The protocol stores...
database. Verio responded that the terms were not binding since users could access the database with or without expressing consent to the terms. The court ruled in favor of Register.com, holding that contractual relationships could be formed whether or not users are required to express assent prior to using a product or service.
Nor can Verio argue that it has not assented to Register.com’s terms of use. Register.com’s terms of use are clearly posted on its website. The conclusion of the terms paragraph states “[b]y submitting this query, you agree to abide by these terms.’’ (Ex. 27 to Pl.’s Sept. 8, 2000 Motion). Verio does not argue that it was unaware of these terms, only that it was not asked to click on an icon indicating that it accepted the terms. However, in light of this sentence at the end of Register.com's terms of use, there can be no question that by proceeding to submit a WHOIS query, Verio manifested its assent to be bound by Register.com's terms of use, and a contract was formed and subsequently breached.
An earlier case, Specht v. Netscape Communications Corp.
Specht v. Netscape Communications Corp.
Specht v. Netscape, 306 F.3d 17 , is a case in the United States Court of Appeals for the Second Circuit regarding the enforceability of browse-wrap software licenses...
, 150 F.Supp.2d 585 (S.D.N.Y. 2001), aff'd, 306 F.3d 17 (2d. Cir. 2002), gave perhaps the clearest definition of a clickwrap license.
A click-wrap license presents the user with a message on his or her computer screen, requiring that the user manifest his or her assent to the terms of the license agreement by clicking on an iconIcon (computing)A computer icon is a pictogram displayed on a computer screen and used to navigate a computer system or mobile device. The icon itself is a small picture or symbol serving as a quick, intuitive representation of a software tool, function or a data file accessible on the system. It functions as an...
. n12 The product cannot be obtained or used unless and until the icon is clicked. For example, when a user attempts to obtain NetscapeNetscapeNetscape Communications is a US computer services company, best known for Netscape Navigator, its web browser. When it was an independent company, its headquarters were in Mountain View, California...
's Communicator or Navigator, a web page appears containing the full text of the Communicator / Navigator license agreement. Plainly visible on the screen is the query, "Do you accept all the terms of the preceding license agreement? If so, click on the Yes button. If you select No, Setup will close." Below this text are three button or icons: one labeled "Back" and used to return to an earlier step of the download preparation; one labeled "No," which if clicked, terminates the download; and one labeled "Yes," which if clicked, allows the download to proceed. Unless the user clicks "Yes," indicating his or her assent to the license agreement, the user cannot obtain the software.
See also
- Browse wrapBrowse wrapBrowse-wrap is a term used in Internet law to refer to a contract or license agreement covering access to or use of materials on a web site. Specifically, a browse-wrap license is expected or assumed to have been agreed to before a user browses the website...
- Electronic signatureElectronic signatureAn electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it . By comparison, a signature is a stylized script...
- Electronic Signatures in Global and National Commerce ActElectronic Signatures in Global and National Commerce ActThe Electronic Signatures in Global and National Commerce Act is a United States federal law passed by the U.S. Congress to facilitate the use of electronic records and electronic signatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered into...
(ESIGN) - In the Matter of Sears Holdings Management CorporationIn the Matter of Sears Holdings Management CorporationIn the middle of 2009 the Federal Trade Commission filed a complaint against Sears Holdings Management Corporation for unfair or deceptive acts or practices affecting commerce. SHMC operates the sears.com and kmart.com retail websites for Sears Holdings Corporation...
- Rudder v. Microsoft Corp.Rudder v. Microsoft Corp.Rudder v. Microsoft Corp. [1999] O.J. No. 3778 . is the leading decision on clickwrap licenses and forum selection clauses in Canada.-Background:...
- Shrink wrap contractShrink wrap contractShrink wrap contracts are license agreements or other terms and conditions of a contractual nature which can only be read and accepted by the consumer after opening the product. The term describes the shrinkwrap plastic wrapping used to coat software boxes, though these contracts are not limited...
- SoftMan Products Co. v. Adobe Systems Inc.SoftMan Products Co. v. Adobe Systems Inc.SoftMan Products Co. v. Adobe Systems Inc. was a lawsuit heard in the U.S. District Court for the Central District of California in 2001 by Judge Dean D...
- Software license