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Sign-in wraps – the newest form of consumer torture

admin Sep 6, 2019 2:30:22 AM

We’ve all been there.  Online shopping for the latest product or service you absolutely must have, and right as you’re about to check out, that annoying message pops up that says something about by continuing, you accept the website’s terms and conditions.  You likely don’t even read the message in its entirety, let alone the hyperlinked, non-negotiable terms contained therein; you just click accept and move on with your day. 

The average Internet user has probably agreed to hundreds if not thousands of these “click-through” contracts.  But what are the legal effects of agreeing to terms you didn’t read?  This article explores that very question.

In our blog post, “I Agree” (to give you my eternal soul, now and forever more) – What’s Lurking in The Fine Print, we showcased some humorous examples of companies that had a little fun highlighting the fact that consumers don’t read the contracts they agree to.  While a court is unlikely to uphold a consumer’s pledge of his eternal soul via a video game license agreement, courts have consistently upheld the validity of click-through (also called click-wrap) contracts, despite the fact that everyone knows people don’t read them.

 We all have a duty to read the contracts we enter into

We all have a legal “duty to read” the contracts we enter into.  This doesn’t mean you have to actually read every contract, but it does mean that you are legally assumed to have done so if you were given the opportunity (for example, by clicking that button that says “I accept,” or “I acknowledge I have read the Terms”).  While this duty to read has been a bedrock principle of contract law for ages, it has recently been tested in the age of “click-wrap,” and most recently, “sign-in wrap” contracts.  Courts are consistently upholding their validity within a duty to read framework.

You agree by signing up

Sign-in wraps are the newest form of user agreement in which the user agrees to a website’s terms by creating an account.  Click-wraps are agreements where the user must affirmatively click a button acknowledging and agreeing to the terms.  Browse-wraps are those where the terms are simply available via a hyperlink at the bottom of the page.

federal judge in the D.C. Circuit recently found that displaying an “I agree” notice to consumers in dark font against a white background near the website’s sign-up buttons was sufficient notice to consumers that by signing up they were agreeing to the website’s terms.  The judge stated that any “reasonably-active adult consumer will almost certainly appreciate” that by signing up for an internet-based service, he is accepting the terms of service of the provider.  The judge further noted that ignorance of the precise terms contained therein does not mean that he is unaware he is entering into a contract.

Even if consumers wanted to read these contracts, they likely couldn’t.

But the story doesn’t end there.  Even if consumers suddenly decided to start reading all the contracts they entered into daily, research indicates that (a) this process would be prohibitively time-consuming, and (b) the average consumer wouldn’t understand them anyway.

recent study conducted by Carnegie-Mellon researches found that it would take 76 work days to read every privacy policy that the average Internet user encounters.  And that’s justprivacy policies, which are generally much shorter than terms of use or terms of service agreements.

Another study recently conducted by researchers at the Victoria University of Wellington in New Zealand found that not only are consumer contracts written in a way that dissuades consumers from reading them (i.e. overly complex and convoluted), but that while consumers are held under a duty to read, the companies creating these contracts are not similarly held under a duty to make contracts readable!

 TermScout can help

In the age of non-negotiable click-through contracts, TermScout’s mission is to empower consumers with the knowledge of what is contained in the contracts they agree to everyday.  Click here to find out more about the services we offer.