Terms, notice and the click: what a user agrees to

1. The problem to open with

Ask for votes: Is Dev bound by the terms? Is Dev bound by clause 9 in particular? Would it change anything if Dev had been forced to scroll to the bottom of the terms and tick a box? Write the numbers on the board for section 6.

2. The signature rule, and why it exists

The starting point in the common law is the signature rule: a person who signs a contractual document is bound by its terms whether or not they read them, and whether or not they understood them, absent fraud, misrepresentation or some other vitiating factor. The classic English illustration is a customer who signed a sales form without reading a clause that excluded the seller’s liability and was held to it. The rule gives commerce certainty and puts the burden of reading on the person who signs.

Ask the class whether the rule is wise. Defenders say that if signatures did not bind, contracts would be endlessly disputable. Critics say that nobody reads standard-form terms, so the rule produces fictions in which the ‘agreement’ is something no one actually agreed to. Both answers are right, and the rest of this lecture is about how law lives with that tension.

3. When there is no signature: notice

Where there is no signature, a party is bound by terms only if they were part of the contract, and for that the party relying on them must have given reasonable notice of them. Three points structure the cases.

• Timing. The notice must be given before or when the contract is made. Terms on a ticket handed over, or on a notice in a hotel room, after the contract has been made come too late.
• Adequacy. The steps taken must be reasonable in the circumstances. A term printed on a ticket may be enough, depending on how clearly the ticket points to the conditions and how a reasonable person would behave. A reference to terms ‘displayed elsewhere’ is weaker than terms the person actually sees.
• Onerous or unusual terms. The more onerous or unusual a term, the more notice it needs. A term that would surprise a reasonable person must be brought fairly and fully to their attention, not buried in small print. The leading English case concerned an extraordinary daily charge for late return of photographic transparencies, which was not incorporated because it had not been properly drawn to the customer’s attention.

A fourth route is a consistent and regular course of dealing: terms may be incorporated because the parties have used them regularly in earlier transactions. But the courts have required a lot of dealings, and the course must be consistent. A few earlier transactions will not do.

4. The click: click-wrap, browse-wrap and sign-in-wrap

The internet re-ran this history in a few years, and courts have used the same principles. Teach three types.

• Click-wrap: the user must take an affirmative step, such as ticking ‘I agree’, before continuing, and the terms are available. Courts have generally enforced click-wrap, as the closest digital equivalent of a signature.
• Browse-wrap: the terms sit behind a link, often in a footer, and the site says that use means acceptance. The user is never asked to do anything about the terms. Courts have been reluctant to enforce browse-wrap unless the user had actual knowledge of the terms or the notice was so clear that a reasonable user could not miss it.
• Sign-in-wrap: the user must create an account or sign in, and the screen says that by doing so they agree to the terms. American courts have enforced sign-in-wrap where the notice was reasonably conspicuous and the user’s action clearly signalled assent, and refused where the notice was hard to see or the button’s purpose was unclear.

Dev’s problem sits between these. Dev took an action (tapping Continue), which looks like assent, but the notice was small, grey and below the button, and the terms were behind a link. The objective test applies: would a reasonable user have understood that tapping Continue meant accepting binding terms, and was the notice conspicuous enough that they ought to have seen it? Design matters. Ask the class to design the screen they would defend in court, then the screen they would attack. It is the best way to remember the rule.

5. Two questions students run together

Incorporation asks whether the terms are part of the contract. Fairness asks whether a term that is part of the contract will be enforced. The answers are independent. A term can be validly incorporated and still be struck down, or fail to be incorporated although it would have been perfectly fair. Students conflate them constantly, and so do AI tools.

On fairness, the controls vary. Many systems restrict exclusion and limitation clauses, especially in consumer contracts: English law has statutory controls and a reasonableness test, and treats some terms in consumer contracts as unenforceable if they are unfair or not transparent. EU law has a directive on unfair terms in consumer contracts. American law uses unconscionability, among other doctrines. The shape is common: a term that causes a significant imbalance to the consumer’s detriment, contrary to good faith, is open to challenge, and a term that tries to exclude liability for certain kinds of harm may be void altogether.

Two further digital points are worth a few minutes each. First, change by notice: many online terms say that the business may change them at any time by posting an update. Whether and how that binds the user is a live question, usually answered by asking whether the user had notice of the change and a real choice to continue or leave. Second, the agent problem: when a person asks an AI agent to sign up for a service, the agent may click ‘I agree’ for them. The question is not new, it is agency: is the user bound by what the agent did, because they authorised it or let others reasonably believe that they had? Ask students what the user should have to say or do before they will be held to what their agent clicked.

6. Back to the photo app

Return to the votes. Take them through in the order of the two questions.

• Incorporation: was a reasonable person told, before or when they tapped Continue, that terms applied? What was on the screen? Was the notice conspicuous? Was tapping ‘Continue’ an affirmative act that could be taken to signal assent, or was it just how you open the app? What would the answer be if Dev had to tick a box beside ‘I agree to the Terms’?
• Onerous terms: is a clause capping liability for the loss of a customer’s irreplaceable data at £10 the kind of term that needs special notice? Argue both sides.
• Fairness: even if incorporated, is the clause enforceable? Is Dev a consumer? Does the clause cause a significant imbalance, or is it a transparent allocation of risk for a free service? Who is best placed to insure against data loss?
• Remedy: if the clause fails, what could Dev claim? What would he have to prove?
• Missing facts: what do you most need to see? The screen Dev saw, the full terms, how Dev’s consent was recorded, whether the app told users to back up photos.

Again, notice what a good answer looks like: it separates the questions, argues each way and says what facts decide it. A bare ‘Dev is bound’ or ‘Dev is not bound’ is not an answer.

7. The AI workshop (25 minutes)

Give each pair the following fictional terms. They are deliberately ordinary, with a few clauses that matter buried among the routine ones.

What to expect. Summaries tend to be accurate on what the terms say in general and unreliable on the clauses that matter most to a user: they often leave out or soften the limitation of liability, the automatic subscription and its cancellation route, the change-by-notice clause and the class-action waiver. A summary that sounds balanced is a risk in itself, because a reader will rely on it instead of the terms. A good debrief has students say what the summary would have to include to be fair to the user, and why that is a legal question and not only an editorial one.

8. Closing (5 minutes)

Return to the three votes. The aim is for students to leave with two questions that they keep apart, incorporation and fairness, a habit of asking what the user actually saw, and a healthy suspicion of any summary of terms that makes them sound harmless.

Student handout: auditing a summary of terms

• Read the terms yourself first, or at least the clauses on liability, money, changes, disputes and data.
• List every clause that limits the user’s rights or costs them money. Check that the summary mentions each one.
• Look for softening: ‘may’ for ‘will’, ‘certain’ for ‘all’, and a missing number.
• Keep two questions apart: are the terms part of the contract, and will they be enforced? Answer each separately.
• Ask what the user saw before they accepted. If you do not know, say so and say what you would need.
• Find every case the AI named, read what it decided and check it fits.
• Write a summary that a reasonable user would not be misled by, and say what you changed.

Verify before you teach

Read each of these yourself before you teach it, and check any detail you repeat. The ‘use’ column says what this lecture uses it for, not a full account of the decision.