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Click-Throughs and Opt-Outs: Information About Contracting Online

Posted by attorney Todd Gallinger

Most of us are familiar with the idea of a contract; we make an agreement with a person to do something, i.e. perform work or buy a car.

Sometimes this agreement is sealed with a handshake; other times the agreement is reduced to writing and signed by the parties.

But what about contracts online?

When navigating through Web sites, you very rarely meet the person or company you are dealing with and certainly signatures are often not exchanged.

This does not mean, however, that contracts are not formed all the time by your online activities.

When signing up for a Web site, very often you will be presented with a big long text box entitled "Licensing Agreement" or "Terms and Conditions."

If printed out, it would likely be dozens of pages and yet you are expected to read through all of that before you can buy a Pez dispenser or sign up for a new Web site.

Though most people do not read through these forms, they can, in fact, be legally binding documents.

If at the bottom of the form you have to select a box, entitled, for example, "Accept Licensing Agreement" and then click a "Next" button, this is referred to as a click-through.

Under federal and state law, this can be interpreted as the same as a signature on a contract, creating a legally binding agreement.

For this reason, it is important to read through the main points of the agreement, particularly if it involves a major transaction.

Another system commonly used online is an "opt-out."

This means that the box for acceptance is already selected and that you have to unclick the button to show you are not agreeing.

Some laws do limit when this is method is appropriate.

However, you often see click-throughs when downloading software to install additional add-ons and tools – and potentially spyware or malicious programs – and also when signing up for mailing lists or listservs.

Though the degree to which we now live online makes it easy to be cavalier about our activities and acceptance of these licensing agreements or terms and conditions, construes should be aware.

Recent changes with the Facebook Web site, where the popular social networking company attempted to institute changes allowing them to use any photo posted on the Web site, caused a backlash from its users, which required them to change its policies.

This would not have happened if some people were not reading the fine print.

Of course, these issues are even more important in e-commerce and business to business transactions.

This article is not intended as legal advice for any single situation. If legal advice is needed, you should contact a qualified attorney in your area.

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