Online Retailers’ Power Over Users
Get Legal Help Today
Secured with SHA-256 Encryption
UPDATED: Apr 16, 2016
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
Online retailers are eager to give their customers the fastest, easiest, shopping experience possible. They certainly don’t want to put any barriers on the path to purchase.
eCommerce companies face a challenge in binding users to their Terms of Service, Licensing Agreements, or other legalities without slowing down (or worse, derailing) the sales process. What’s a company to do?
The Evolution of Browsewrap
Back in the “olden days” — when most software was purchased in a store, and users brought a box with a disc in it home to install the software — software companies relied on “shrinkwrap” agreements.
They would print the terms of the license to use the software on the box itself, with a notice that warned customers that if they don’t agree to the terms, they shouldn’t rip open the plastic. By tearing the shrinkwrap plastic, buyers were agreeing to the terms.
As the digital world moved more and more online, software companies mostly switched to “clickwrap.” At some point in the purchase process, users had to check a box or click a button signifying their agreement to the terms, which were either right there next to the button, or found in a link near the button. This is still very common — before Apple will install an update to the operating system on your Mac, iPad, or iPhone, you have to click a box indicating you’ve read and agree to the terms of the license.
Even though most people presumably don’t actually read all that legal fine print, the fact that you said you did binds you to them.
However, if you tell people that they have to check a box indicating they agree to the terms, some people will actually stop to read them. Some people may get distracted, and the sale might not be finalized. So a little click can result in a loss of some business.
Many companies have tried to get around this problem by going a step further, from clickwrap to browsewrap.
What do the Courts Say?
Unfortunately for companies that like to give their users as smooth a purchase experience as possible, browsewrap agreements cam be difficult to enforce.
A 2012 article in Forbes describes the problems Zappos ran into when trying to enforce a browsewrap agreement compelling arbitration when faced with dozens of lawsuits stemming from a data breach that affected 24 million customers.
In its ruling the court threw out Zappos’ attempt to force arbitration based on the browsewrap agreement:
Despite the fact that this case is four years old, many companies don’t seem to have gotten the word. The same exact thing happened in a more recent case, from March, 2016.