"Wrapped" Up: Hidden Terms and the Corporate Risk of Online Contracting

Greg Mitchell, Counsel - Litigation Services, UnitedLex Corporation, USA
Phil Goodin, Senior Vice President & General Counsel, Corporation, USA

Managing contractual obligations is a key role of in-house legal departments. Many times, the process is clear: prospective agreements are reviewed, and obligations are identified and communicated to the appropriate intra-company stakeholders. It is a cut-and-dry exercise that allows every potential obligation to pass before the eyes of in-house attorneys. Risks are noted, analyzed and mitigated. But the Internet has greatly increased a company’s exposure to contractual obligations. In fact, every time an individual accesses a webpage in his or her capacity as an employee, the company could be at risk of incurring obligations that the legal department does not become aware of until it is too late. This is due to the prevalence of ‘clickwrap’ and ‘browsewrap’ agreements (referred to collectively as ‘wrap’ agreements), which allow a party to enter into a contract over the Internet by clicking an ‘agree’ button or merely accessing a webpage. U.S. Courts have shown a willingness to enforce such agreements against corporate entities. This paper explores the mechanics of ‘wrap’ agreements, as well as the U.S. case law that has developed around these agreements. It also discusses risks that companies should be aware of, arguments for avoiding enforcement and ways to prevent employees from unintentionally entering into such agreements.

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USA Contract IT October 2015 Vol. 9, No. 33, Autumn 2015

Greg Mitchell

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Greg Mitchell - Counsel, UnitedLex. Mr. Mitchell has been with UnitedLex since August 2013, and has served as Counsel since March 2014. He is a graduate of the University of Missouri School of Law.

Phil Goodin

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Phil Goodin - Senior Vice President & General Counsel, UnitedLex. Mr. Goodin graduated from the University of Iowa College of Law where he was a Full Merit Scholarship Recipient. He began his litigation career at Spencer Fane Britt & Browne, focusing high

UnitedLex Corporation

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UnitedLex is a global leader in legal and data solutions with a singular mission to improve the performance of leading corporations, law firms and academic institutions. UnitedLex provides unparalleled solutions resulting in risk mitigation, efficiency im

USA Contract IT October 2015 Vol. 9, No. 33, Autumn 2015