Clickwrap is a mode of entering into an online contract in which the user signifies her consent to be bound by the terms of the contract by clicking a button – usually a “Yes / No” or an “I agree / I disagree” button.
Such contracts are most often used in cases where the same boilerplate agreement needs to be signed by multiple users. Common examples of such contracts are privacy policies. You may have seen them as part of the installation process of software packages. They are usually a take-it-or-leave-it sort of contract where the person accepting the terms of the agreement lacks bargaining power and has no power to negotiate the terms of the agreement.
By virtue of Section 10A of the Information Technology Act, 2000, clickwrap is a legally valid mode of entering into a contract.
Section 10A confers legal validity to eContracts in India. It does this by categorically stating that a contract cannot be denied enforceability just because it was executed electronically. Electronic means, such as clickwrap, can therefore be used to legally enter into all types of contracts.
However, there are 2 narrow exceptions to this rule. Clickwrap cannot be used for the following documents:
- Documents listed in the First Schedule of the IT Act, 2000.
- A document which must mandatorily be signed under any law, rule or regulation.
Here is a handy table which tells you where can you legally use clickwrap:
The legal enforceability of any eSign type depends on:
- How well it can establish the identity of the signer (Authentication)
- Whether the document can be altered after the signatures are affixed (Integrity)
- Whether the parties can deny their acceptance of the terms and conditions at a later stage (Non-repudiation)
Clickwrap can be tough to enforce because it doesn’t perform these 3 functions well.