Clickwrap

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 often 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" 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 has become more common than the previous shrink-wrap method because it allows users to read the terms of the agreement before accepting them. This was presented in the ProCD vs. Zeidenberg shrinkwrap case in 1996.

The content and form of every clickwrap agreement will vary widely. In general, a clickwrap typically requires an end user to manifest his or her assent by clicking an "ok" button on a dialog box or pop-up window. A user manifests rejection by clicking cancel or leaving. Upon rejection, the user does not accept the product or service. Like the shrink wrap contract, a user must either accept or reject. The terms of service or license do not necessarily have to appear on the same webpage, but it must be accessible before acceptance.

For the license to take legal effect, the licenser must be able to present proof of that the presumed licensee has been willing to sign away the copy owner rights granted under copyright: The international copyright treaty, Article 4, equals computer programs with literary works. Thus, computer programs are automatically placed under copyright, the latter which grants the copy owner normal rights use, and others fair use the computer material. The signing away of ones legal rights can normally only be done by a properly signed paper contract, or under some circumstances, orally if supported by witnesses or recordings, or, in even more restricted use, via electronic signatures issued by the local government, as a person charged with violating a license agreement otherwise can merely claim not knowing who opened the box or clicked the agreement box in the install software, and it is not possible for the licenser to provide proof of whom is the purported licencee, nor has the person charged any obligation to provide such proof. In addition, legal rights can only be signed away if local law admits it; so a properly signed paper contract may not be enough to abrogate copy owners rights, unless there are special legal provisions admitting it.

Legal consequences in the United States of America

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 ultimately been upheld.

• In re RealNetworks, Inc. Privacy Litigation, 2000 U.S. Dist. LEXIS 6584 (D. Ill., 2000) (upholding an arbitration clause)
• Hotmail Corp. v. Van$ Money Pie, 1998 U.S. Dist. LEXIS 10729 (D. Cal., 1998) (summary judgment for breach of contract for violating the terms of service for, inter alia, using a Hotmail account for purposes of sending spam and/or pornography)
• I. Lan Sys. 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 UCC.

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), the described the key to a clickwrap agreement was that acceptance or rejection must occur before being given access.

Essentially, under a clickwrap arrangement, potential licensees are presented with the proposed license terms and forced to expressly and unambiguously manifest either assent or rejection prior to being given access to the product

The court held that the click-wrap dynamic did not exist where users were presented with the license simultaneously with the end product.

An earlier case, Specht v. Netscape Communs. Corp., 150 F. Supp. 2d 585 (D.N.Y., 2001), gave perhaps the most clear 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 icon. n12 The product cannot be obtained or used unless and until the icon is clicked. For example, when a user attempts to obtain Netscape'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.