Dive Brief:

• The contract lifecycle management company (CLM) Ironclad has released a product designed to help legal teams more effectively and efficiently defend their online agreements against lawsuits.
• Ironclad said its Snapshots feature for users of the company's Clickwrap product is the first solution that enables customers to automatically capture proof of user acceptance of online terms for click-through contracts.
• This patent-pending product has been released along with the company’s 2022 Clickwrap Litigation Trends Report, which found that 34% of online agreements are not enforced in court.

Dive Insight:

Clickwrap, or click-through, agreements are legally binding online contracts that are executed when a user clicks on a button displaying acceptance language or checks a box next to acceptance language.

Last September, CLM provider Ironclad unveiled its Clickwrap product to help companies manage such agreements. DocuSign also offers its DocuSign Click product.

Even with solutions such as these, online agreements are frequently the subject of court challenges, and Ironclad reports that 44% of online contracts found to be unenforceable by courts were "due to suboptimal screen design, lack of evidence, and/or poor version control."

Screenshots are the most common piece of evidence used by companies defending the validity of their digital contracts. But Brian Powers, Ironclad's GM of Clickwrap, said legal teams sometimes have to spend months working with engineers and product personnel on frequently fruitless data mining expeditions for contract acceptance screenshots.

Ironclad’s Snapshots product released in late April is designed to help legal teams produce contract screenshots quickly and at scale.

“Snapshots allows them to go back and see exactly what the screen looked like at any given time of acceptance, attach that to the record, and then produce something that is court-ready,” Powers said. “You’re saving a ton of time, a ton of money, a ton of resources.”

Powers said he envisions two primary use cases for Snapshots.

The main one is companies that sell things to consumers online at a very high volume and consumer-facing software-as-a-service (SaaS) companies.

Prominent companies already using the existing Clickwrap product include DoorDash and Snapchat. Powers said companies like those would greatly benefit from Snapshots.

“One of the biggest risks in their companies is massive-scale litigation that will typically come in the form of a class action,” he said. “The best way to defend yourself against one of those is to have enforceable terms of service that waive the ability to form a class or require binding arbitration as a way to settle the dispute.”

Powers also envisions companies that want to look and act more like e-commerce style businesses using Snapshots.