Wrap Agreements: What They Are and How They Work

Wrap agreements, also known as “shrinkwrap” or “clickwrap” agreements, are a type of legal contract that has become increasingly important in the digital age. They are commonly used by online retailers, software companies, and other businesses that provide goods or services through the internet.

What is a Wrap Agreement?

A wrap agreement is a contract that is presented to a customer in electronic or physical form as part of a product purchase or service agreement. The customer is required to accept the terms of the agreement before they can proceed with the purchase or use of the product or service.

Wrap agreements can take several forms, including:

– Shrinkwrap: A wrap agreement that is included with a physical product. The agreement is usually printed on the packaging and must be accepted by the customer before they open the product.

– Clickwrap: A wrap agreement that is presented to a customer online. The agreement is usually displayed on a website or in a software program and the customer must click a button or check a box to accept the terms.

– Browsewrap: A wrap agreement that is posted on a website but not presented to the customer in an obvious way. Instead, the customer is considered to have accepted the terms simply by using the website.

Wrap agreements typically contain terms and conditions that govern the customer’s use of the product or service. These may include restrictions on how the product can be used, liability limitations, and dispute resolution provisions.

Why Are Wrap Agreements Important?

Wrap agreements are important for several reasons:

– They protect the business: By requiring customers to accept specific terms and conditions, businesses can limit their liability and protect their intellectual property. This is especially important for online businesses that may have customers all over the world.

– They provide a clear agreement: Wrap agreements provide a clear, written agreement between the customer and the business. This can help prevent misunderstandings and disputes.

– They save time and resources: By using a wrap agreement, businesses can save time and resources that would otherwise be spent negotiating individual contracts with each customer.

However, it is important to note that courts have different standards for enforcing wrap agreements. Some courts require a high level of notice and acceptance, while others may enforce the agreement if the customer had reasonable notice of the terms and conditions.

Tips for Creating Wrap Agreements

If you are creating a wrap agreement for your business, there are several best practices to keep in mind:

– Make the agreement clear and concise: Customers are more likely to accept the terms if they can easily understand them.

– Make the agreement visible: If you are using a clickwrap agreement, make sure it is prominently displayed on your website or within your software program.

– Give customers a chance to review the agreement: Provide customers with easy access to the agreement before they accept it. This will give them the opportunity to review the terms and conditions before they make a purchase.

– Stay up-to-date: As laws and regulations change, be sure to update your wrap agreements to stay in compliance.

In conclusion, wrap agreements are an important tool for businesses that provide goods or services through the internet. By using a wrap agreement, businesses can protect themselves, provide a clear agreement with customers, and save time and resources. If you are considering using a wrap agreement for your business, be sure to follow best practices and consult with legal counsel to ensure that your agreement is enforceable.