When you create your SaaS app, the last thing on your mind may be how your legal agreements should be displayed.
But there’s an important distinction between two of the primary methods of displaying your agreements that you should be aware of.
On one hand, we have clickwrap methods, and on the other we have browsewrap methods, and the nature of SaaS has an impact on how these methods should be used.
Clickwrap vs. Browsewrap
Browsewrap is a very commonly used method of obtaining agreement to legal documents on a website or mobile app (e.g.Terms of Use or Privacy Policy) where the user has to browse to find the legal agreement.
On a website, the link to a Terms of Use agreement may be in the footer, while on a mobile app it may be in a menu inside the app.
Clickwrap, on the other hand, is a method that requires the user to click to say that they have agreed to your legal agreement.
A common way of doing this is by using a pop up with an “I Agree” button on your legal agreement when your user first opens your app.
Or, you can include a tick box saying “I Agree” on all web forms when the user creates an account.
You can learn more information about these 2 methods in our definitive guide.
The most common way of displaying legal agreements for your SaaS app is by way of a browsewrap method. Usually this is done by displaying the links to the legal agreements in the footer of the website, like this example from Box, an online file sharing company:
Here’s another example from Hortonworks, a Hadoop cloud-based data processing and calculation platform:
The Hortonworks example was right at the bottom of the page, after having to scroll down quite a lot.
In contrast, clickwrap on many websites is executed by way of a tick-box when the user signs up or logs in. Here’s an example from Salesforce:
You can see that Salesforce has a tick-box at the bottom of their free trial web form, asking the user to agree to their Master Subscription Agreement.
This is essentially their “Terms of Use” agreement combined with their subscription terms.
I was surprised to find that many of the other SaaS companies that I looked at did not do this in their web forms.
Which is better, but why?
Clickwrap is the better choice in terms of making sure that you are covered legally. There have been numerous cases where the Court decided that browsewrap was not sufficient.
A recent case in the US was the 2012 Zappos case.
In this case Zappos had a data leak, and the information of Zappos’ customers was taken by hackers. The customers sued Zappos, but Zappos argued that they had displayed their Terms of Use on their website, which didn’t allow the customers to sue.
The Court was not convinced, and said that the customers did not have “actual or constructive knowledge” of the Terms of Use agreement. The Court said:
Here, the Terms of Use hyperlink … is the same size, font, and color as most other non-significant links. The website does not direct a user to the Terms of Use when creating an account, logging in to an existing account, or making a purchase. … Without direct evidence that Plaintiffs click on the Terms of Use, we cannot conclude that Plaintiffs ever viewed, let alone manifested assent to, the Terms of Use.
What Zappos used was as a browsewrap agreement, as customers had to browse Zappos.com website to find the link to the Terms of Use agreement.
Courts have generally held that browsewrap methods are not enough for a contract to be made between the website or app operator and the user, unless the link is displayed prominently and frequently.
As a result, when you’re trying to figure out how best to implement a Terms of Use or a Privacy Policy in your website or mobile app, implementing a clickwrap method is the first thing that you should consider.
It’s particularly important that your users have agreed to your legal agreements, as your users will be paying a subscription fee for your app, and you may have unique data security considerations they need to agree to if their data is being stored in the cloud by another provider.
If you do use a browsewrap method, make sure that your links to the legal agreements are displayed prominently and frequently.
On mobile, it can be harder to make sure that your users see and agree to any agreement, as space is in short supply on a tiny mobile screen. A common way of implementing browsewrap for a mobile app is to display a link to any of your policies or agreements within an “About” page that is found via a menu.
Here’s an example of browsewrap from the YouTube mobile app for iOS:
To access the “YouTube Terms of Service” link, the user has to click on the dropdown menu, then click on the “Settings” button, then scroll all the way down to the bottom.
So it requires quite a lot of browsing even just to find the link!
With browsewrap, the assumption is that since you have provided the user a copy of your agreement(s) on your website, they are bound by them. Courts are not so sure, and in many cases browsewrap agreements have been held to be unenforceable.
The best method is to use a clickwrap “I agree” button with a popup when your user first opens your app.
A browsewrap method like the example from YouTube above may not be enough to protect you, and there would be a strong argument that your users did not have knowledge of any legal agreements.
Here’s an example of a clickwrap “Agree” button that appears when setting up your Apple ID on the iPhone 5:
You can see that the user needs to choose the “Agree” button before they can continue with setting up their Apple ID. This is a good way for you to ensure that your users have agreed to your Terms of Use agreement when you create your mobile app.
Make sure that you set up a clickwrap method of agreement to your Terms of Use and Privacy Policy agreements on both your SaaS website and your mobile app, particularly if your user can access your SaaS from both of them.
For your website, make sure you include a tick-box upon sign up or login.
For mobile, include a pop up when a user first opens your app, and require that they click “I Agree” before they can progress to using the app. This will give you a lot more certainty that your users have agreed to your legal documents, which can protect you from liability.