By Alejandra Zilak

ntering into a contract should be a transaction that’s beneficial to both parties. Within the industry, you provide self-storage facilities in exchange for payment.

Granted, there are additional elements to keep in mind, such as conditions of use, contract length, and renewals; and to be legally binding, both parties must fully understand these terms.

In today’s day and age, where most transactions are done electronically, certain software platforms have become popular (DocuSign, PandaDoc, and DropBox Sign, to name a few). Something else that’s prevalent is to simply click boxes to demonstrate that tenants agree to the terms. This type of online consent is known as a clickwrap agreement. But are there any hurdles to enforceability when placed on self-storage websites? And what’s the difference between a clickwrap and browsewrap?

Browsewrap agreements exist when a website states that users agree to their terms and conditions simply by using the website. Generally, these types of agreements are unenforceable because users haven’t expressly agreed to anything. On the other hand, clickwrap agreements require specific steps that communicate the user’s consent. For example:

• Are users warned that clicking on such a checkbox means being bound to terms and conditions?
• Are the terms clear enough for a reasonable person to understand them?
• Are they easy to read (e.g., font size and color of text against color of background)?
• Are there clear instructions (e.g., having to scroll all the way to the end of the agreement or receiving notification that the user must agree to the terms prior to being allowed to click through to the next page)?

In a nutshell, a clickwrap agreement involves specific steps a person must take that demonstrate that they knowingly entered into a quid pro quo transaction. If your self-storage website includes online leases with this type of format, you should implement clickwrap best practices. This will maximize the likelihood of prevailing in court should a dispute arise with a tenant.

The problem with legal issues is that attorneys have made it an art form to go back and forth with arguments. Since litigation can be lengthy and extremely expensive, it’s crucial to be aware of clickwrap signature best practices to cover all your bases. Some of these include:

Make it obvious it’s an agreement.
Make it very clear to every single person entering the site that the text on the screen is listing terms and conditions. You can do this by including a bolded header, by having different colored text in the required sections, or by implementing a scrollwrap (a pop-up agreement that interrupts the user, informing them of the terms of the agreement. The user would then need to scroll to the end of the pop-up and click on a checkbox to continue with the transaction).

Implement a user-friendly layout.
Every single website and landing page should prioritize user experience. Anything that’s too cluttered or has convoluted navigation will confuse the reader. And courts will definitely look at a page’s layout to determine whether the terms were presented clearly and whether a reasonable person would’ve understood that they were consenting to them.

Don’t allow users to proceed without clicking on the checkbox.
While a significant portion of the population tends to skip long agreement terms, making them unable to move forward with a transaction unless they click on the box means that they are aware of their existence.

List all relevant laws and regulations, as well as legal consequences.
Even someone who’s in a hurry to enter into an agreement will pause if there’s a statement along the lines of: “I certify that the information above is true and correct. Providing false information constitutes XYZ violation that could result in XYZ fines.”

Provide users with a copy of the agreement.
Since transactions are meant to be mutually beneficial, both parties should have easy access to the terms of the agreement. This also makes it a lot easier for either one to refer to it in the event of questions or a potential dispute. You can either email it to them or make them easy to find on your website and/or their online account.

If the agreement is modified, memorialize it in writing.
If you have a subsequent interaction that modifies any of the terms of the agreement, direct the user to an additional clickwrap agreement where they get to check a new checkbox next to the new terms. Make sure it’s time stamped and that they receive a copy of this addendum to their email or online account.

One of the best ways to remember best practices is to see them in action. A perfect example of the need for an obvious notice that the user is entering into an agreement is the case Nicosia v. Amazon. Dean Nicosia sued Amazon because he purchased a weight loss product that he alleged requires a prescription from a physician. At the time of the sale, the product’s label apparently did not disclose the inclusion of a controlled substance.

Regardless, Amazon sought to get the case dismissed and to compel arbitration instead, based on their conditions of use. As evidence, Amazon showed that the screen to complete the purchase indicated: “By placing the order, you agree to Amazon.com’s privacy notice and conditions of use.” The conditions of use were hyperlinked in blue, and Nicosia had to click on a box stating that he agreed to those conditions prior to being able to click on the “complete purchase” button. The question presented in court was whether such statement and the hyperlinked terms were sufficient to incorporate them into the purchase agreement.

The court ruled that Nicosia agreed to the terms in two ways: When users sign up for an Amazon account, they are provided with notice of the conditions of use. On both instances that Nicosia purchased the weight loss product, he clicked on a box stating that he was agreeing to the conditions of use, which were conspicuously hyperlinked in blue lettering.

On the other hand, in the case of Sgouros vs. TransUnion, Plaintiff Gary Sgouros paid TransUnion to get a report on his credit worthiness. He then printed out the results and took it to a car dealership. Unfortunately, the TransUnion report was inaccurate, and Sgouros sued them because he did not receive what he paid for.

Like many companies, TransUnion sought to dismiss the lawsuit based on the claim that its website informs users that disputes must go to arbitration instead of proceeding as lawsuits.

The court ruled that Sgouros did not agree to arbitration because there were no steps to show that he saw the 10 pages of terms and conditions. Nothing indicated that the text continued beyond an initial box with information, or that Sgouros needed to scroll all the way to the end of the page. Since a reasonable person wouldn’t have been able to tell that the terms and conditions continued for 10 pages, the agreement was not enforceable.

This is a clear reminder of the importance of a user-friendly layout. It also highlights the need for guardrails to prevent users from proceeding to the next step without acknowledging they have seen all the terms.

Clickwrap agreements are legally binding as long as the user is aware of the existence of all terms. Consulting with a lawyer will ensure that not only are you following best practices but that you’re also complying with industry standards and local regulations.