With so many self-storage companies now offering online rentals and, therefore, using online leases, it’s becoming increasingly important to ensure that once a tenant accepts the agreement, there’s no room for him to later claim, “I didn’t know the rules” or “I didn’t agree to that.” For this reason, a facility’s terms and conditions should be presented on its website in such a way that they’re easy to access and understand, so they’re enforceable.
There are two methods for presenting lease terms and conditions online: browsewrap and clickwrap. Let’s look at the difference between them and what it means for your self-storage operation.
In a browsewrap system, the customer is directed via a link from the lease to a page on your website where he can review (browse through) the terms and conditions. The website then provides a notice that reads, “Your use of our site constitutes your acceptance of the terms and conditions provided.”
As you might imagine, most customers never take the time to click on the terms and conditions link before agreeing to the transaction. There’s also no way for the business to assert the customer did in fact review them, since there’s no actionable “assent” required as part of the review. As a result, a browsewrap is commonly disfavored in comparison to the clickwrap agreement.
With a clickwrap agreement, the customer must toggle through the terms and conditions before reaching a place where he must agree to them by clicking a checkbox. The clear difference between the browsewrap and clickwrap is prior to providing assent, there’s a physical act of scrolling through and checking a box to agree. As such, clickwrap terms and conditions are a stronger way to confirm the approval of an agreement by a tenant and, therefore, a stronger way to enforce those provisions.
In legal cases that have dealt with clickwrap agreements, the courts have equated the act of scrolling through the text with the act of a customer reading though the provisions of a multi-page contract. Once the agreement is signed, it’s considered by the court to have been read and understood by the customer. There have been multiple cases that have addressed these issues and found clickwrap agreements enforceable including DeJohn v. The TV Corp., I.Lan Systems v. Netscout, Nguyen v. Barnes & Noble, Scherillo v. Dun & Bradstreet, and Zaltz v. JDate.
Whichever method you use, there are common elements you should include in your online lease to enhance its enforceability. Consider:
- Using a check box, so there’s a place where the tenant must click to agree to the terms and conditions. Include clear notice language that reads, “By clicking in this box, you’re stating that you’ve read and agree to all the terms and conditions provided.”
- Adding functionality to confirm that if the tenant doesn’t assent to the terms and conditions, he can’t complete the transaction to enter the lease.
- Providing the terms and conditions in a scroll box so the tenant must affirmatively move through the document before he can agree to it.
- Presenting the terms and conditions in a font size that can be easily read by the user, at least 12 points. In some states, the terms must exceed 12 points; for example, North Carolina and Nevada use a 14-point font for certain provisions.
- Providing a mechanism by which the terms and conditions (or a copy of the executed contract) are viewable and printable by the tenant after he has accepted them.
If you offer or are considering online rentals and lease agreements, it’s vital to make your terms and conditions clear to customers. Using a browsewrap vs. clickwrap approach can make a huge difference in the effectiveness of your contract.
Note: This article was originally published in the author’s July 2018 “Legal Monthly Minute” Newsletter
Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. He represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant-claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability, and loss-control safeguards. To reach him, call 404.364.4626; e-mail firstname.lastname@example.org.