Electronic Transaction: Are you Covered?


As use of the internet and e-mail in business has become commonplace, so has the electronic transaction. However, entering electronic transactions has both its pros and cons. 

The pros are obvious.  These transactions are quick and cheap.  Now, an Ohio company can enter nationwide or global transactions nearly instantaneously.  The cons are less obvious.  In written transactions, companies frequently prepare and include detailed terms and conditions that govern the transaction.  However, terms and conditions are often afterthoughts and not properly included in electronic transactions.  The absence of terms and conditions in electronic transaction creates substantial risk that a business will be subjected to unfavorable terms. 

The most comprehensive way to address this issue is through a “click wrap” agreement whereby a customer is directed to a separate page containing the company’s terms and conditions and is asked to click a button indicating that they agree to the terms and conditions.  If a click wrap agreement is impractical, a good alternative is a “browse wrap” agreement.  Under this scenario, the business includes a hyperlink to its terms and conditions in electronic communications.  A few characteristics the browse wrap agreement should include are that the hyperlink should be a different color from the rest of the text; it should be titled in an obvious manner, such as “Terms and Conditions”; and it should be placed on the first page of the electronic communication so the customer does not have to scroll down to view it.

While ensuring that your terms and conditions are properly incorporated into your electronic transactions, it is also a good idea to review and update your terms and conditions to ensure they still cover your company’s needs and apply to electronic transactions. 

For assistance in incorporating your terms and conditions into electronic transactions and updating your terms and conditions, please contact your Stark & Knoll attorney, or, Donald Scherer, at dscherer@stark-knoll.com, (330) 572-1317.