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9 Int'l. In-House Counsel J. 1 (2015-2016)

handle is hein.journals/iihcj9 and id is 1 raw text is: International In-house Counsel Journal Vol. 9, No. 33, Autumn 2015, 1 Wrapped Up: Hidden Terms and the Corporate Risk of Online Contracting PHIL GOODIN Senior Vice President & General Counsel, UnitedLex Corporation, USA & GREG MITCHELL Counsel - Litigation Services, UnitedLex Corporation, USA 1 Synopsis Managing contractual obligations is a key role of in-house legal departments. Many times, the process is clear: prospective agreements are reviewed, and obligations are identified and communicated to the appropriate intra-company stakeholders. It is a cut- and-dry exercise that allows every potential obligation to pass before the eyes of in-house attorneys. Risks are noted, analyzed and mitigated. But the Internet has greatly increased a company's exposure to contractual obligations. In fact, every time an individual accesses a webpage in his or her capacity as an employee, the company could be at risk of incurring obligations that the legal department does not become aware of until it is too late. This is due to the prevalence of 'clickwrap' and 'browsewrap' agreements (referred to collectively as 'wrap' agreements), which allow a party to enter into a contract over the Internet by clicking an 'agree' button or merely accessing a webpage. U.S. Courts have shown a willingness to enforce such agreements against corporate entities. This paper explores the mechanics of 'wrap' agreements, as well as the U.S. case law that has developed around these agreements. It also discusses risks that companies should be aware of arguments for avoiding enforcement and ways to prevent employees from unintentionally entering into such agreements. 2 Clickwrap and Browsewrap Background 2.1 'Wrap' agreements defined Clickwrap and browsewrap agreements are the main avenues by which website users enter into contacts online.1 With a 'clickwrap' agreement, a website user is presented with the site's terms of use, generally before accessing a website, purchasing a product or downloading software. The user is then required to click or check a box that indicates that he or she has reviewed the terms and agrees to them before being granted access to the website, purchasing the product or downloading the software. 'Browsewrap' agreements are a bit different. With a browsewrap agreement, a website user is not blatantly presented with terms of use or given an express option, such as a button, to indicate that he or she has read and accepted those terms. Instead, the terms are listed somewhere on the website, often via a hyperlink placed at the top or bottom of every page. The user is never prompted to expressly agree to terms; rather, the user demonstrates his or her acceptance by continuing to access, use or stay on the website. See Hines v. Overstockcom, Inc., 668 F. Supp. 2d 362, 366 (E.D.N.Y. 2009) aff d, 380 F. App'x 22 (2d Cir. 2010)('On the internet, the primary means of forming a contract are so-called clickwrap (or click-through) agreements, in which website users typically click an I agree box after being presented with a list of terms and conditions of use, and the browsewrap agreements, where website terms and conditions of use are posted on the website typically as a hyperlink at the bottom of the screen.'). ISSN 1754-0607 printISSN 1754-0607 online Internationalln-house Counsel Journal