How Clickwrap Maturity Can Impact Business Performance and Mitigate Legal Risk

A clickwrap refers to the common method of capturing consent to a set of terms, such as terms-and-conditions and privacy policies, by clicking a button or a checkbox. When properly implemented and maintained, clickwraps can be a highly effective legal methodology, particularly when capturing consent for online transactions.

However, if not properly implemented, there can be real implications to the business—for example, Frost & Sullivan found 83% of respondents experienced legal disputes regarding their clickwrap agreements over the past five years. Legal fees ranged from $50,000 to more than $5 million.

In this report, Frost & Sullivan surveyed more than 300 decision-makers in the United States and Europe about their use of clickwrap solutions. The goal was to understand how companies use clickwraps today, overall satisfaction and success rates with their clickwrap solutions and how the maturity of their clickwrap solutions affect outcomes. Here are some of the key findings:

• Nearly 3 out of 4 organizations are considering a new clickwrap solution because they’re launching a new product, service or website; required by their legal department; or as a result of regulatory / compliance requirements

• 70% of respondents said a top challenge with obtaining customer consent is capturing evidence of that consent

• Half of all organizations update their agreements at least two to three times a year, but most are not able to capture consent to these new versions, leaving them open to legal risk