Clickwrap Agreement Case: A Cautionary Tale for Online Businesses
In today`s digital age, more and more transactions are happening online. One of the key requirements for any online business is to have a robust and well-drafted Clickwrap Agreement. The Clickwrap Agreement is the standard practice online for obtaining user consent to the terms and conditions of a website or web-based application. However, ensuring compliance with Clickwrap Agreements is no easy task, as the recent Clickwrap Agreement case between Zappos and its customers has demonstrated.
In 2012, Zappos, a popular online shoe and clothing retailer, suffered a catastrophic data breach. The breach resulted in millions of customer data being compromised, including their names, addresses, phone numbers, and email addresses. Consequently, customers filed a class-action lawsuit against Zappos, claiming that it had failed to protect their data.
Zappos, in its defense, claimed that its Clickwrap Agreement included clauses that protected it from liability in the case of a data breach. However, the court found that the Clickwrap Agreement was not enforceable because it did not provide sufficient notice to customers about the key clauses, including the liability protection clause. The court also found that the agreement was buried in a long list of terms and conditions, making it difficult for customers to understand what they were agreeing to.
The Zappos Clickwrap Agreement case highlights the importance of having a well-crafted and clear agreement that is designed to obtain the informed consent of customers. The agreement should contain plain and clear language, and the key clauses, including liability clauses, should be prominently displayed. Customers should be given the opportunity to review the agreement before accepting it, and website owners should ensure that the agreement is enforceable under applicable laws.
The lesson from the Zappos Clickwrap Agreement case is clear: online businesses cannot afford to take shortcuts when it comes to Clickwrap Agreements. Businesses that want to ensure compliance with the law and protect their interests must take the time to draft clear and concise agreements that meet legal requirements.
In conclusion, all businesses that operate online should take the Zappos Clickwrap Agreement case as a cautionary tale. Online businesses must ensure that their Clickwrap Agreement is enforceable and contains necessary clauses to protect their interests and comply with applicable laws. By doing so, they can protect their customers and their business.
