In the first of a series of white papers on Terms of Service (TOS) issues, EFF today released The Clicks That Bind: Ways Users “Agree” to Online Terms of Service. The paper aims to answer a fundamental question: when do these ubiquitous TOS agreements actually become binding contracts? We discuss how courts have reacted to efforts by service providers to enforce TOS, and suggest best practices for service providers to follow in presenting terms to a user and for seeking his or her agreement to them.
The white paper examines both clickwrap agreements—whereby service providers require the user to click an “I Agree” button next to the terms—and browsewrap agreements—whereby service providers try to characterize one's continued use of the website as constituting “agreement” to a posted set of terms. While neither method automatically creates enforceable contracts, some presentations may still be upheld even if the user never actually reads and understands the terms. The key is whether the service provider allows the user reasonable notice and opportunity to review the terms before using the website or service.
Of course, just because a TOS creates an enforceable agreement, does not mean that every provision of the TOS will be enforced by a court. In our next white paper, we'll examine which particular provisions are most unfair to consumers, including provisions that have aroused the skepticism of courts and regulators.