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Businesses urged to beware 'clickwrap' trap

18 December 2008

Businesses ordering or installing computer software could find themselves in a legal tangle with 'clickwrap' agreements

IT specialists at national law firm Shoosmiths said the agreements present companies with a stark ‘take it or leave it’ choice.

Before being able to complete software orders or installation, buyers must indicate acceptance of the provider’s terms and conditions by clicking an I agree button.

Solicitor Alex Newson said: “Clickwrap agreements are common, but present a potential legal pitfall for businesses, and add a new level of complexity concerning what terms apply to software contracts.

“Businesses can find that having negotiated specific software contract terms, they then find themselves bound by a later clickwrap agreement.

“So the clickwrap trap could take many businesses by surprise, particularly if they are using third party IT contractors to install their software for them.”

To avoid the clickwrap trap, businesses should consider:

• ensuring all software ordering/installation goes through a procurement/legal review process
• drafting contracts that reduce the risk of suppliers applying their clickwrap agreements in place of  negotiated contracts
• not clicking I accept if unhappy with the terms of a clickwrap agreement
• demanding an indemnity from third party IT contractors to cover acceptance of contract terms without express authority

Newson said: “In 2001, the Law Commission stated that clicking on a website button can be enough to show consent to an agreement, so businesses really must be on their guard if they want to avoid entering agreements they’d rather not.”

Read the full article

For further information please contact:
Name: Alastair Gray
Phone: 08700 864096
Email: Alastair.Gray@shoosmiths.co.uk

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