We recommend a four-step strategy for implementing click-wrap agreements in the United States. Creating an initial click-wrap page with the following settings should maximize the chances of Internet companies applying their click-wrap agreements. Internet companies must be careful not to judge their terms and conditions so harshly that they are considered contracts of liability. Accession treaties arise when the other party is presented with a standardized form of agreement drafted by the party with superior bargaining power, whose choice is to accept or reject the contract without the possibility of negotiating its terms. In Tony Brower v. Gateway 2000, Inc.7, the court followed ProCD`s decision by stating that if contract terms sent to a consumer with computer products clearly indicate that they are binding on the consumer if they keep the products for 30 days and the consumer retains the products, the supplier and the consumer have entered into a valid and enforceable contract. In addition, a clause requiring arbitration for disputes arising out of the contract in Chicago does not make the contract an unenforceable liability agreement. However, the Court held that a clause requiring such disputes to be settled under the rules of the International Chamber of Commerce (“ICC”) is unscrupulous and therefore unenforceable. THE ICC rules require the consumer to pay a fee of $4,000, of which $2,000 is non-refundable even if the consumer wins. Since these fees exceeded the price of Gateway`s products, they effectively deprived buyers of a forum to resolve disputes arising from the purchase of the product. The tribunal then selected an arbitrator to hear the dispute. U.S.
courts have ruled almost uniformly that these types of agreements are enforceable (Conference America Inc.c. Conexant Sys. Inc., M.D. Ala., No. 2:05-cv-01088, 9/10/07). Indeed, the courts have found them enforceable even if the client has not read them (Druyan v. Jagger, S.D.N.Y., No. 06-cv-13729, 29.08.07). Unfortunately, companies that offer goods and services electronically over the Internet cannot expect all of their click-wrap contractual terms to be applied internationally. Courts in some other countries may not accept the legality of click-wrap agreements as easily as in the United States. However, with country-specific pre-planning and adjustments, internet companies can significantly increase their chances of being able to apply most of the terms of their click-wrap agreements in most major international markets.
Click-wrap agreements are useful for Internet companies that sell goods and services for a variety of reasons. First, it is not practical to conclude separately negotiated agreements with each end-user. With the volume of traffic that commercial websites hope to receive, most internet companies don`t want to have the burden of reaching an agreement with each end user separately. Second, most end users prefer simplicity and convenience when using the Internet. Most end users don`t want or expect to spend time and effort negotiating terms of use before using websites. Third, the use of click-wrap agreements discourages even large buyers from insisting on separately negotiated terms. This has the practical effect of increasing the online retailer`s negotiating position vis-à-vis the consumer. Shrink Film Contracts – Contracts attached to the computer program product (CD/floppy disk). The term “shrink wrap” describes the shrink film plastic packaging that covers software boxes or the terms and conditions that accompany the products upon delivery.
Shrink film claims are unsigned authorization agreements that stipulate that the customer`s acceptance of the terms of the claim is demonstrated by the opening of a shrink film grouping or other product grouping, by the use of the product or by any other specific instrument. Click-wrap agreements take their name from the so-called “shrink-wrap” agreements, the license agreements that today sell most packaged consumer software. The term “shrink film” comes from the manufacturing process of “shrinking” the transparent cellophane packaging around the product packaging. Originally, software manufacturers tried to print all the license text outside the product packaging, which is visible through the cellophane packaging, noting that by breaking the seal and opening the box, the user would be bound by the terms of the license. Today, a well-formulated shrink film notice on the outside of the product packaging should include a statement that the software is protected by copyright and that the data and its users are subject to the terms of an agreement in the box. The terms of the license agreement are printed in full in the user manual, in the license brochure or in the product help menu. The fact is that these types of agreements can pose significant legal and commercial problems. They can compromise a company`s sensitive data, expose the company to liability, compromise the company`s ownership of its own intellectual property, and cause the company to pay unforeseen additional fees. Three concrete examples: Based on the advice of a local lawyer, we believe that traditional shrink film agreements are likely to be applied in countries such as Canada, France, Italy, Spain, the Netherlands, Denmark, Norway, Sweden, Finland, Brazil, Saudi Arabia and Hong Kong. Subject to consumer protection laws, shrink film agreements may also be applied in Mexico, Argentina and Chile. Applicability is less secure in Japan and Korea, and unlikely in Germany, the UK, China and possibly Australia. While there is no set standard for products that come with a shrink film license, there are some common elements that can be found in most products with a shrink film contract.
The fact that click-wrap agreements can be enforced does not mean that every agreement is actually enforceable. The parties should continue to pay attention to the general principles of contract law when determining the enforceability of certain agreements. In principle, internet companies should ensure that end-users have expressed their consent in order to be meaningfully linked. In Caspi v. Microsoft Network2 sued the plaintiffs, among others, for breach of contract and fraud, because Microsoft “transfers” MSN membership into more expensive plans. The New Jersey Appeals Division upheld the New Jersey Supreme Court`s decision that the forum selection clause in Microsoft network subscription agreements was enforceable and valid. Some steps can be taken to increase the likelihood that click encapsulation agreements will be applied internationally. Internet companies must try to translate the terms of the Click Wrap agreement into the local language and comply with applicable local legal requirements. In addition, in Spain, all packaging must be in Spanish. In France, documentation and online help must be in French. In addition, there will be country-specific differences in consumer warranty requirements, which should be reflected in click wrapping agreements established in those countries. Local consultants should be hired and consulted to ensure that the necessary changes are made so that click-wrap agreements can be applied to individuals and businesses in these countries.
In the United States, the landmark case of Pro CD v. Zeidenberg in 1996 confirmed the validity of the shrink film agreements. In proCD, a federal court of appeal considered whether a shrink film licence included in computer software is a binding contract. The defendant acquired ProCD CD-ROMs containing compilations of various telephone directories. These CD-ROMs have been packed in a box with a user manual. A notice was printed on the packaging that the conditions of use of the CD-ROMs were defined by the terms of the user manual. .