As with any contract, it is essential to know who the parties are to the agreement. The user is the person clicking onto the site and downloading it onto his or her computer. Since the provider wants the contract to be binding, any definition of user should include a representation that the user can legally enter into the agreement.
For example, is the user a person individually or an agent for others, including a corporation? Does the user have the ability to enter into a contract or is he or she a legal minor or otherwise incapable of entering into a binding contract? An affirmation by the user that he or she is legally capable of entering into a contract or license agreement should be included. On the other hand, the provider must be identified as well. The Web site may be a subsidiary or agent of another company that may hold the copyright, trademark, or other rights, so it is important to name the correct party. This may mean making sure that a subsidiary or agent has been properly given the rights to use copyrighted material, trademarks and the like on the site.
Agreement that the users are over 18: This can help ensure that the user is either over 18 and bound by the contract, or supervised by a parent who agrees to the contract and the minor’s use.
Agreement that the user is truthful in information disclosed on the site, agrees to what he or she is buying, and agrees to pay for it: This can provide a remedy against the user if fraudulent credit card information, contact information or other information is provided, or if the user disputes the charge later. Threat of litigation regarding the agreement can sometimes result in faster resolution of payment disputes.
Agreement that the user agrees not to copy materials on the site. Agreement not to reverse engineer or break into the site, and not to use the Website materials, products or services to violate law.
Agreement that the user will use the site in accordance with the instructions, and will not to disclose his password to others for use, and that the site has a license (permission) for use of anything the user submits or posts to the site.
Agreement that the use of the site is at the discretion of the company, and that any use may be terminated by the company at any time.
Terms of Purchases or Services Provided
The clickwrap agreement should obtain the user’s agreement to any policies regarding the purchase, including warranty, shipping, returns or otherwise, of products and/or services. It is important to be aware that FTC regulations and other laws govern sales of products over the Internet, as they do mail order and store purchases.
The clickwrap agreement should include language that waives legal warranties that are implied by law regarding the sale of products (goods) under the Uniform Commercial Code. The UCC implied warranties include the following.
Warranty of Title
Every seller, by the mere act of selling, makes a warranty that the seller’s title is good and that the transfer is lawful as to passage of title.
Warranty Against Encumbrances
Every seller, by the mere act of selling, makes a warranty that the goods shall be delivered free from any lien of which the buyer at the time of the sales transaction had no knowledge.
Warranty of Fitness for a Particular Purpose.
A buyer may intend to use the goods for a particular or unusual purpose, compared to the ordinary use for which the goods are customarily sold. If so, the seller makes an implied warranty that the goods will be fit for that purpose when:
- the buyer relies on the seller ‘s skill or judgment to select or furnish suitable goods, and
- when the seller at the time of contracting knows or has reason to know the buyer’s particular purpose and of the buyer’s reliance on the seller’s judgment.
When the buyer makes the purchase without relying on the seller’s skill and judgment, no warranty of fitness for a particular purpose arises.
Warranty against Infringement (merchant seller).
Unless otherwise agreed, every merchant seller warrants that the goods will be delivered free of the rightful claim of any third person by way of patent infringement, trademark infringement, or any other intellectual property law infringement.
Warranty of fitness for normal use (merchant seller).
A merchant seller makes an implied warranty of the merchantability of the goods sold. This warranty is in fact a group of warranties, the most important of which is that the goods are fit for the ordinary purposes for which they are sold.
Disclaimer of Warranties
The seller will want to disclaim all warranties, expressed or implied, as to merchantability, fitness for a particular purpose, or non-infringement. These disclaimers should be in the form required for disclaimers under the UCC and other applicable laws — i.e., they should be conspicuous, (all caps, bold, etc.). These warranties apply to the sales unless they are appropriately waived or disclaimed in writing.
This term should state that the materials on the Web site are copyrighted. As such, they may not be modified, published, transmitted, reproduced, posted, or displayed in any media, including but not limited to electronic, print, mechanical and photocopying, other than for the personal use of the user while he or she visits the site.
If the Web site contains any of the provider’s trademarks, logos, and/or service marks, their use must be restricted. To the extent that the various marks can be identified and listed, they should be. Users should be put on notice that they are not being granted any license or right to use any of the trademarks, logos and/or service marks, other than to download them for personal use while visiting the Web site.
The agreement should state that the user agrees to be bound by all applicable laws and regulations that may pertain to the site, including U.S. export and reimport laws and regulations.
Accuracy. The provider should disclaim any representations or warranties as to the accuracy of information on the site or any omissions or other errors in the content.
Limitation of Liability. The seller will want to put the user at risk for use of the site. This would include disclaiming liability for damages, direct or indirect and actual, consequential, or punitive, arising out of or in connection with the use of the site.
Viruses. The seller will want to disclaim any representations that the site as downloaded by user is virus free. At most, the provider may want to state that it has taken reasonable efforts to ensure that its site is virus free but that it cannot guarantee or warrant that it is virus free when it is downloaded by the user.
Activity on the site. To the extent that a site user is able to post information on the site, the provider of the site should state that it does not monitor, but reserves the right to monitor, the site for the content of postings. The provider should assume no responsibility for or liability for such monitoring. It should prohibit the user from placing or posting on the site any statement that is defamatory, libelous, false, obscene, pornographic, profane, or inaccurate.
Privacy. The site should post a public policy concerning privacy on the site. The agreement, or a separate policy statement, should disclose to what extent the site collects information on users, the type of information collected, whether the individual user can be identified, what the information collected is used for, who has access to the information, whether the information is sold or otherwise made available to third parties, and how the user can restrict the use of the information.
Confidentiality. The provider should inform the user that information the user posts on the site is deemed non-confidential and nonproprietary.
Indemnification. The user should be required to defend, indemnify, and hold harmless the provider from and against all claims and expenses, including attorney fees, arising out of the use of the Web site.
Choice of law. The agreement should include a choice-of-law provision.
Venue. The agreement should include a provision as to where venue would be proper. It also should include language identifying where the service is being performed or other similar information to bolster the venue choice.
Termination. The provider should be able to terminate the agreement if the user violates any provision of the use agreement or any laws or other regulations.
Acceptance. That the site is covered by a use agreement should be made clear to the user in a conspicuous manner. The user should be required to acknowledge that he or she has read the terms of the agreement, understands them and agrees to be bound by them. Ideally, the user should acknowledge agreement by being required to type in a phrase such as “I accept.”