Clickwrap Agreements in the United States

The clickwrap license displays terms electronically, and the user manifests assent by clicking the acceptance button. (iLan Sys., Inc. v. Netscout Serv. Level Corp., 183 F. Supp. 2d 328, 329, 334 (D. Mass. 2002), describing the ubiquity of user license agreements where the user manifests assent by clicking “I Agree” and thereby creating an enforceable agreement to limit liability).

Software is typically transferred with EULAs, and the typical clickwrap or clickstream user license agreement will state: “By clicking the ‘accept’ button, you are consenting to be bound by and are becoming a party to this agreement. If you do not agree to all of the terms of this agreement, click the ‘do not accept’ button and the installation process will not
continue.”

Courts have validated this method of entering into a license agreement so long as the user had adequate notice and an opportunity to manifest assent (or disapproval) of the terms. See, for example:

• iLan Sys., Inc. v. Netscout Serv. Level Corpid. at 338 (ruling that user clicking “I agree”
  box is an appropriate way to form enforceable contract);
• Forrest v. Verizon Commc’ns, Inc., 805 A.2d 1007, 1010–11 (D.C. Cir. 2002) (holding that
  clickwrap agreement was enforceable and that adequate notice was provided of
  clickwrap agreement terms where users had to click “Accept” to agree to the
  terms in order to subscribe);
• Koresko v. RealNetworks, Inc., 291 F. Supp. 2d 1157, 1162–63 (E.D. Cal. 2003) (ruling that consumer that clicked box on the screen marked “I agree” on website manifested assent to the terms of a clickwrap agreement); and
• Stomp, Inc. v. NeatO, LLC, 61 F. Supp. 2d 1074, 1081 (C.D. Cal. 1999) (upholding clickwrap where user assented to terms by clicking “accept” button)

Courts generally will enforce user license agreements so long as the “terms are clear and acceptance is unambiguous, regardless of whether [the user] actually reads them.” “Clickwrap agreements allow users to manifest assent to contractual terms presented to the user before installation of computer software programs. (1)
Generally, as here, the user must indicate acceptance of the clickwrap agreement
to proceed with the installation.” RealPage, Inc. v. EPS, Inc., 560 F. Supp. 2d
539, 541 n.1 (E.D. Tex. 2007). Clickwrap evolved out of shrinkwrap agreements
“which are generally license agreements placed inside the cellophane
‘shrinkwrap’ of computer software boxes that, by their terms, become effective
once the ‘shrinkwrap’ is opened.” See:

• Stomp, Inc., 61 F. Supp. 2d at 1080 n.11;
• Burcham v. Expedia, Inc., 2009 U.S. Dist. (E.D. Mo. Mar. 6, 2009) (upholding clickwrap agreement’s forum selection clause);
• A.V. v. iParadigms, LLC, 544 F. Supp. 2d 473, 480 (E.D. Va. 2008) (upholding
  clickwrap agreement where a student had to register for a term paper service by
  creating a profile on defendant’s website and clicking “I Agree” to the terms of
  the user agreement, which was displayed directly above the “I Agree” link that
  the student had to click), rev’d on other grounds, A.V. v. iParadigms, LLC, 562
  F.3d 630 (4th Cir. 2009); and
• Adsit Co., Inc. v. Gustin, 874 N.E.2d 1018, 1024 (Ind. Ct. App. 2007) (upholding Adsit’s policy containing a forum selection clause and choice of law clause where user was required to click on a button reading “I Accept” that was placed at the bottom of the webpage containing the policy). (2)

Resources

Notes

1. Based on the Article “The Path of Internet Law: An Annotated Guide to Legal Landmarks”, by Michael L. Rustad and Diane D’Angelo
2. Id.