Click-wrap agreements are contracts formed entirely over the Internet. A party posts terms on its website pursuant to which it offers to sell goods or services. To buy these goods, the purchaser is required to indicate his assent to be bound by the terms of the offer by his conduct -- typically the act of clicking on a button stating "I agree." Once the purchaser indicates his assent to be bound, the contract is formed on the posted terms, and the sale is consummated. No paper record is created nor is the signature of the purchaser required.
Click-wrap agreements derive their name from shrink-wrap agreements, by which most software is sold today. The software vendor offers to sell or license the use of her software according to terms accompanying the software. The purchaser or licensee agrees by his conduct to be bound by such terms. Such conduct typically takes the form of the retention or use of the software after being provided an opportunity to review the contract's terms and return the software for a full refund if they are unacceptable.
Lawyers have long opined that click-wrap agreements are enforceable contractual arrangements. In what appears to be the first judicial pronouncement on this subject, Hotmail Corporation v. Van Money Pie Inc., et al., C98-20064 (N.D. Ca., April 20, 1998), the United States District Court for the Northern District of California has agreed. In Hotmail, the court held that defendants were bound by Terms of Service posted on a website as a result of their act of clicking on a button "I agree."
http://www.internetlibrary.com/publications/cwahe_art.cfm
Martin H. Samson
Partner
Davidoff Malito & Hutcher LLP
New York