Clickwrap Agreements: Our Guide to Understanding and Implementing Them

Curious About How to Implement Clickwrap Agreements Effectively?

Clickwrap agreements are a very popular way for companies to collect and demonstrate user consent at scale. They’re relatively easy to implement, legally binding, and don’t impact the user experience much during the onboarding process.

But clickwraps are contracts—and it’s worth understanding the risks (and how to mitigate them) before implementing them. In this SignWell guide, we’re diving into the legal side of clickwrap agreements and sharing best practices for making them effective and compliant.

Let’s get started.

Why Listen to Us?

At SignWell, we’ve helped more than 61,000 businesses collect legally binding e-signatures at scale.

We know the ins and outs of getting agreements signed quickly and securely, and when clickwraps are the best choice. So, if you’re looking for guidance on clickwrap agreements, you’ve come to the right place.

What Are Clickwrap Agreements?

Clickwrap agreements (also known as clickthrough agreements) are a kind of online contract that users can agree to with a single click (hence the name).

You’ve probably seen and agreed to hundreds (maybe thousands) of clickwrap agreements over the years you’ve been active online. Things like terms of service, privacy policies, end-user license agreements (EULAs), and even cookie policies are considered clickwrap agreements.

Here’s an example from Dropbox:

When you click the “Agree and sign up” button, you’re actually signing three separate agreements (or contracts) with Dropbox—their Terms of Service, Service Agreement, and Privacy Policy. And like other kinds of contracts, your agreement protects both you and Dropbox legally if terms are broken.

In general, clickwrap agreements are legally binding and enforceable—and they have been since the late 90s . We’ll elaborate on the caveats to that in a bit, but the basic idea is that by clicking “I Agree,” you’re consenting to all of the terms and conditions set forth.

E-Signatures vs. Clickwrap Agreements

The distinction between clickwraps and e-signatures can be a bit confusing.

On the one hand, clickwraps are a form of e-signature. Electronic signatures are defined as any electronic sound, symbol, or process that’s attached to a record and executed or adopted by a person with the intent of signing.

So when you click “I Agree,” you’re electronically signing the contract.

On the other hand, when people use the term “e-signature,” they’re usually referring to a more formal, legally binding agreement that involves adding a virtual signature or initials to a document using an e-signing tool like SignWell .

Here’s a quick summary of the similarities and differences:

Clickwrap Agreements

E-Signatures

Legally binding and enforceable.

Requires users to actively confirm their acknowledgment and acceptance of terms (often by clicking a button).

Involves digital markers, symbols, or a combination of characters representing consent to terms.

Terms & conditions, software usage agreements, online purchases.

Employment contracts, NDAs, sales agreements.

Generally more basic, with fewer security layers and encryption features compared to e-signatures.

Incorporates robust encryption, detailed audit trails, and identity verification methods to ensure document integrity and signer authenticity.

Often includes provisions for record-keeping to maintain evidence of user consent.

Usually incorporates robust record-keeping mechanisms to ensure the integrity of the signed documents.

When to Use Clickwrap Agreements vs. E-Signatures

Clickwrap agreements work well in situations where:

• You need to process a high–volume of agreements quickly.
• You have a standardized agreement that’s the same for everyone.
• You want to minimize friction.
• The stakes are relatively low (i.e., challenges are unlikely, monetary value is low).

For these reasons, you’ll usually see clickwraps used for basic terms of service agreements, privacy policies, and end-user license agreements. These are all standardized documents that generally don’t require any negotiation.

In situations where one or more of those four conditions aren’t met, you may want to consider an e-signature solution like SignWell . Our platform offers much more enhanced security, flexibility, and customization options for your agreements with features like:

• Audit trails (complete with IP addresses, timestamps, and more)
• Drag-and-drop document setup
• Document templates
• Automatic reminders and notifications
• Signing orders and bulk-sending

Keep in mind that there is a wide range of variation within the e-signature category. For example, Advanced Electronic Signatures (AES) require a higher level of security and authentication than Basic Electronic Signatures (BES).

Benefits of Clickwrap Agreements

Streamlined Acceptance

The biggest benefit of clickwrap agreements is how easy it is for users to accept them. In fact, it’s arguably too easy—one study found that only 1% of users read a company’s terms before clicking the “I agree” button.

Regardless, from a company’s perspective, this ease of acceptance is a huge advantage. It minimizes friction at key moments like signup, purchase, or download and leads to faster conversions.

Legal Enforceability

In addition to being “easy” to sign, clickwrap agreements are also legally enforceable. Courts have consistently held that these types of agreements are just as binding as traditional written contracts, as long as they meet certain baseline requirements.

There are tons of real-world examples where companies like Amazon and Uber have won cases against users who have tried to claim that they didn’t read or understand the terms they agreed to.

Whether you feel that’s fair , is a whole other debate—but the fact remains that well-executed clickwrap agreements hold up in court.

Easy Embedding

Finally, clickwrap agreements are incredibly easy to embed wherever you need them. While e-signature solutions like SignWell offer integrations and an intuitive API that can be used to embed signature agreements into your website or app, clickwrap agreements can be placed in text fields during signup or checkout processes.

This makes it convenient for both you and your users. You don’t need any technical expertise or special tools to include a clickwrap agreement on your website or app. And users won’t have to navigate away from the page to sign, making the process quick and seamless.

Best Practices for Creating Legally Binding Clickwrap Agreements

1. Give Clear Disclosure

Across endless court cases and legal precedents, it’s clear that giving proper disclosure to users is a key factor that judges are looking for.

What does disclosure look like in practice? Usually, it boils down to explaining what a clickwrap agreement is—“by doing X, you agree to Y.” That said, how you explain this can make all the difference.

Here are some important requirements:

• The full contracts need to be easily accessible. Here you can see that each contract you agree to in the clickwrap is clearly noted and hyperlinked.

• The UI can’t be confusing. This requirement is a bit vague, and we’ll cover clickwrap design a bit more thoroughly below. For now, just understand that you want each user’s full attention on the fact that they’re agreeing to a legally binding contract.

2. Make Consent Active and Unambiguous

Another common thread in the case law is the requirement for active and unambiguous consent to the terms of a clickwrap agreement. To translate, this means that the user needs to take an action to express their consent—and they need to be made fully aware that the action they’re taking is expressing consent.

The simplest way to do this (and the route most often taken) is to prevent users from moving forward with your service if they don’t consent to the terms. Judges tend to favor this method—for example, in Feldman v. Google, Inc. , the judge had this to say in their decision:

“The user here [Feldman] had to take affirmative action and click the “Yes, I agree to the above terms and conditions” button in order to proceed to the next step. Clicking “Continue” without clicking the “Yes” button would have returned the user to the same webpage.”

Here, clicking the “Yes” is the affirmative action, and the button’s label is clear and unambiguous.

3. Use Clear and Concise Language Within the Agreements

Beyond the clickwrap itself, you also need to make sure that the agreements users are signing are written in clear and concise language. This means avoiding legal jargon and using simple terms that the average user can understand.

Not only does this make it easier for users to actually read and comprehend the agreements, but it also helps prevent any potential confusion or misunderstanding down the line. If a user doesn’t fully understand what they’re agreeing to, they may feel duped or misled later on.

4. Understand the Leading Reasons for Rejection

Before you start implementing clickwraps, it’s also a good idea to learn about all the possible reasons why a judge might decide to reject them in court. This will help you avoid these pitfalls and ensure that your clickwrap agreements are legally binding.

Some of the most common reasons for rejection include:

• Lack of clear disclosure: We covered this one already.
• Implied consent: It’s difficult to argue that a user has given their consent if they were not made aware of the terms and conditions in the first place. That’s why browsewrap agreements (where users “consent” by simply using the website) are not as legally sound as clickwrap agreements.
• Unconscionability: This is a legal term used when one party has significantly more bargaining power than the other. If a court deems your clickwrap agreement to be unconscionable, it could be rejected on those grounds alone. To avoid this, make sure your terms are fair and reasonable for both parties.
• Misrepresentation or fraud: If a user can prove that they were misled or deceived into agreeing to the terms and conditions, it could render the agreement invalid. Be transparent and truthful in your terms to avoid any potential claims of misrepresentation.

5. Think Carefully About Design and Placement

The placement and design of the clickwrap agreement within the user interface are vital for ensuring visibility and effectiveness.

Here are some tips for designing and placing your clickwrap agreement:

• Make it prominent: Place the agreement prominently, making it clear to users that they’re entering into a legally binding contract.
• Use simple fonts and colors: Clickwraps aren’t supposed to be pretty—they’re meant to be clear and easy to understand. Stick with simple fonts and colors to ensure readability.
• Use a checkbox: Require users to check a box indicating their agreement before proceeding. This serves as an extra layer of confirmation.
• Keep it short: Avoid lengthy agreements that require users to scroll through pages of text. Keep your clickwrap concise and only include essential terms and conditions.

6. Optimize for Mobile

Mobile optimization is a must for any successful clickwrap implementation.

For a better mobile user experience, make sure your clickwrap design fits well on small screens. A good mobile clickwrap layout should focus on user experience by adjusting to limited screen space while keeping text clear and usable. Using responsive design, you can make a mobile-friendly clickwrap that improves user engagement.

Also, think about font size, where buttons go, and interactive elements that could be used to enhance the mobile user experience.

7. Make Your Agreements Accessible

It’s important to make sure all users can understand the terms they’re agreeing to. With that in mind, follow the guidelines laid out by W3C to make sure your clickwrap is accessible for people with disabilities.

This might include:

• Providing alt text for images
• Using appropriate colors and contrast for readability
• Adding labels to form fields for screen readers
• Making sure the clickwrap can be navigated using keyboard commands

8. Notify Users About Changes

Policies and agreements are rarely static documents. But—just like a standard contract—you can’t change the terms without following a pretty specific process.

Make sure to notify your users of any changes made to the agreement. This can be through email, pop-up notifications on your website or app, or simply keeping a log of the dates and changes on your website for users to review.

Additionally, give users the option to opt out of the updated agreement if they choose. This is usually done by having them sign an additional clickwrap agreement for every update.

9. Record and Store Consent

Maintain a record of user consent for each clickwrap agreement. This documentation can be important in the event of a dispute or legal challenge. Implement a robust system for storing and retrieving consent records, and make sure that they’re securely maintained to protect both the user and the business.

Conclusion

There you have it—nine tips for creating an effective clickwrap agreement.

Remember, the goal is to clearly and unambiguously gather user consent at scale. In that sense, clickwrap agreements are a balancing act between limiting the amount of time and effort it takes to sign the agreement and ensuring that the agreement is legally binding and enforceable.

Looking for a more customizable and secure tool for collecting user consent? Consider using an e-signature tool like SignWell . We offer a variety of features and integrations to help you create, send, and store contracts and agreements with ease.

Disclaimer : SignWell is not a law firm, and this article does not constitute legal advice. Always consult with a legal professional before implementing any agreements or contracts.

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