I work with website designers a lot -- making sure that the Customer Agreements of my clients are presented as part of the registration process in a way that's legally enforceable.

One of the key components of your basic website legal compliance documents is your Customer Agreement (which may have many different names such as Membership Agreement, Subscription Agreement, Terms of Sale, Content License Agreement, etc.).

Some of my clients think that their Customer Agreement will be enforceable solely because of legal mumbo jumbo I put in it. Not true! Proper presentation during your registration process is also a key to enforceability. If the agreement is not presented properly, it will not be enforceable.

And as I point out to my ecommerce clients and their website designers... if your Customer Agreement is not enforceable, then all of your carefully worded disclaimers and limitations of liability will be ineffective. The result -- you would be exposed to substantial liability.

Specht v. Netscape Comms. Corp

A good example of a click-wrapped agreement that was presented improperly can be found in the case of Specht v. Netscape Comms. Corp., 150 F. Supp. 2d 585 (S.D.N.Y. 2001), aff'd. 306 F.3d 17 (2nd Cir. 2002).

In the Specht case, Netscape's website developer designed its download page for Netscape's SmartDownload software with little regard for contract enforceability.

Netscape's download page provided a download button which downloaded the SmartDownload software. The only reference to a license agreement required the user to scroll to the bottom of the same web page which provided a link to the license agreement. Clicking on this link directed the user to another page which stated that use of the software was governed by a license agreement that required still another click before the user could read the contract terms.

The 2nd Circuit ruled that Netscape's agreement was unenforceable because of 3 deficiencies:

* the user did not have to click on an "ACCEPT" or "I AGREE" button to indicate assent; * the text on the web page accompanying the download did not clearly state that agreement was a pre-condition to use; * the failure to provide "reasonable notice" of the existence of contract terms.

Lessons Learned From The Specht Case

Lessons learned from the Specht case involve 2 basic methods of successfully incorporating your Customer Agreement into your website - the full page method and the scroll box method.

The full page method is the most conservative method. This method requires the placement of the "I AGREE" button at the bottom of the page containing the contract terms (thereby requiring the user to at least scroll to the bottom of the page to click).

The scroll box method requires the placement of the "I AGREE" button on or in close proximity to a scroll box containing the scrollable contract terms coupled with visible explanatory text providing notice of the contract terms.

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