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Legal Updates

Click wrapping and accepting general terms and conditions

03 August 2015 #Dispute Resolution


What is click wrapping?

  • A way of indicating acceptance to particular terms and conditions through clicking an "ok" or an "agree" button on a website (as opposed to clicking “cancel” or closing the window which indicates a rejection). 
  • In clicking “ok” or “agree” the user becomes bound by the specific terms of service and these may not always appear on the same webpage or window. 
  • However they must be accessible before acceptance and this is usually done through the existence of a link on the webpage; this has the effect of putting the purchaser on notice that certain terms apply.  

Is this a valid means of acceptance in the UK?

According to El Majdoub v CarsOnTheWeb the European Court has recently decided that, in certain circumstances, it is. 

In this case, an electric car had been sold to the buyer – a car dealer – for a “very good price”.  The sale had taken place through the seller’s website. However before the car was delivered to the buyer, the seller cancelled the sale.  They did so because of damage allegedly sustained to the vehicle but which they only spotted during preparations for transit of the car to the buyer.   This was unbeknownst to the buyer who believed instead that the sale had been cancelled because the car had been sold at a disadvantageously low price.  They therefore brought legal proceedings against the defendant, crucially, in the German courts, and on the basis that this was the country in which the seller was established. 

Irrespective of the reasons for cancelling the sale contract, the seller challenged the buyer’s claim on the basis that it should instead have been brought in the Belgian court, as stipulated by their general terms.  These terms had been validly incorporated into the sale agreement by the presence of a link on their website; through “click wrapping”.  The buyer sought to challenge the validity of incorporation by this means, arguing that because the link did not automatically lead to the window opening up (it has to be clicked on), the terms had not been sufficiently brought to their attention and therefore were not incorporated.

The court rejected this argument with the result that the seller’s terms were considered binding.  Their reasoning? That the requirement of European legislation for terms to be recorded in a durable form in order for them to apply does not necessarily mean that the durable record actually be created; it need only be an option, for example, in providing the party with the option to print or save the terms.  Click wrapping was therefore sufficient to bind the buyer to the seller’s terms and conditions of sale.  

What could this mean to your business?

 The internet now provides an ever safer and even more convenient forum within which to do business.  Recent research undertaken in the US market has predicted that by 2020, in the US alone, the internet business-to-business market will be worth $1 trillion; that’s twice the size of the predicted US business-to-consumer e-Commerce market in 2020.  The European Court appears to be taking steps to ensure it stays abreast with developments in internet selling practice and to ensure that European businesses are not left behind.

However it is worth sounding a note of caution. Business-to-consumer transactions will still require consumers to ‘receive’ written confirmation or confirmation in another durable medium which means that the practice of making information accessible only via a hyperlink on a website will still not be enough in business-to-consumer situations.

 

Clarkslegal, specialist Dispute Resolution lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Dispute Resolution matter please contact Clarkslegal's dispute resolution team by email at disputeresolution@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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