Mind The Wrapping: Ensuring The Validity Of Online Agreements

Whether your game is sold to consumers in a box, downloaded through an online storefront, or accessed via browser, the era of the paper or shrink-wrap licence is long over. Modern end-user licence agreements are almost always online contracts that rely on a user clicking an "accept" button ("clickwrap" agreements), or agreements that rely on the user's mere navigation on a website ("browsewrap" agreements).

A lot depends on the validity of these agreements, since they contain key risk management and intellectual property clauses. Yet court decisions in the United States and Canada have shown that if online agreements are not implemented correctly, they might be invalid or unenforceable. While both clickwrap and browsewrap agreements are normally enforceable,¹ particularly in business to business contexts,² enforceability is not guaranteed. This bulletin examines why courts choose not to enforce these agreements, and how software developers can avoid these pitfalls.