Click Wrap Contracts: Creating Them And Agreeing To Them

There was an interesting article in this week’s issue of Privacy and Security Law, “Clickwrap Notifying Software Recipients Of Pop-Up Installation Is Valid, Enforceable” (a subscription site).

Basically, Direct Revenue, an advertising company that produces software that delivers ads to Internet users’ computers, lures customers to view ads by making popular screen savers or games free of charge. When the free software is delivered to the Internet user, the applications also install advertising software that generates pop-up ads.
After receiving many consumer compliants, in 2006 the New York Attorney General’s office had charged that Direct Revenue was practicing deceptive business practices, trespass and false advertising.
However, the New York Supreme Court found on March 20, 2008, that Direct Revenue was NOT engaged in deceptive business practices, or any of the other charges.
Why? Because the investigators for the case conducted tests of the web sites that distributed Direct Revenue’s advertising software and they found that Direct Revenue…
1) Provided a license agreement to the end user that indicated the software would be installed on the end-user’s computer.
2) Installed the advertising software only after the end user explicitly clicked on a “yes” button to consent to the terms of the end user license agreement, which was hyperlinked to the page.
3) The end user license agreement indicated the software would collect information on users’ online activities to display ads, and specifically indicated that advertisements would be delivered in the form of pop-up ads.
4) The end user license agreement provided instructions for uninstalling the software, and contained a disclaimer of warranty.
In New York, as well as in many other locations, including non-US locations, clickwrap agreements are enforceable when the consumer has been given what is considered a sufficient opportunity to read the online contract and then accepts the contract terms.
These are the Notice and Consent requirements within most data protection laws throughout the world.
Because the online contract present a hyperlink specifically referring to the agreement, and the end user had to explicitly and actively accept the terms by clicking “yes,” it was not considered a deceptive practice, false advertising, or trespass.
This brings up issues from both sides of the topic:
1) What kinds of click wrap contracts do your organization present to your web site visitors? Do they meet the notice and consent requirements of all the locations where you have potential customers and consumers?
2) What kind of click wrap contracts do your personnel agree to when visiting web sites from your company’s network? Are they agreeing to things that could impact the performance of your network? Or, are they delivering monitoring technologies onto your network?

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