Traditional Agreements vs Standard Terms

Written by Cassine Bering | April 30, 2024

IP Contracts

Contracts are essential for safeguarding your business and can be established through various means such as oral agreements, behaviours, and written documents. To minimise misunderstandings, it’s best to have contracts in writing. Broadly speaking, there are two main styles of written contracts to choose from: traditional signed agreements and wrap standard terms.

Traditional Signed Legal Agreements

These agreements are fundamental in legal transactions and involve a detailed review and signature by all parties, clearly indicating acceptance of the terms.

Pros:

  1. Clarity and Formality: These agreements typically go through thorough negotiations and both parties are fully aware of the terms. This process decreases the likelihood of misunderstandings.
  2. Legally Binding: The physical act of signing provides strong evidence of intent to adhere to the agreement, making it enforceable in court.
  3. Customisation: They can be tailored to fit the specific needs of the parties involved.

Cons:

  1. Time and Cost: They require significant time and resources to draft and negotiate.
  2. Inflexibility: Post-signature changes require formal amendments, complicating adaptability.
  3. Accessibility: The need for a signature can be impractical for transactions needing quick or mass processing.

Wrap Agreements (Clickwrap and Browsewrap)

Found primarily online, these involve users accepting terms by clicking a button or by simply using a website, without signing anything physically.

Pros:

  1. Efficiency: They facilitate quick, high-volume transactions, ideal for e-commerce and digital services.
  2. Lower Costs: These agreements avoid the negotiation process, presenting terms as fixed and non-negotiable.
  3. Ubiquity: Common in online environments, users are familiar with this format.

Cons:

  1. Enforceability Issues: Courts may challenge these agreements if the terms are unfair or acceptance wasn’t evident.
  2. Consumer Skepticism: The lack of explicit consent can deter users and affect business reputation.
  3. Lack of Negotiation: No scope for customisation, which can be limiting for complex deals.

Browsewrap Agreements via Email Attachments

These agreements extend the browsewrap model by attaching terms to emails typically used for quotations, invoices, or booking confirmations.

Pros:

  1. Documentation: Terms attached as PDFs provide a permanent record accessible for future reference.
  2. Flexibility: Allows for complex terms without overloading the main email content.
  3. Wide Reach: Utilises universal email and PDF formats to ensure broad accessibility.

Cons:

  1. User Engagement: There’s a risk that recipients may overlook attachments if not clearly prompted.
  2. Enforceability Issues: Similar to other wrap agreements, proving explicit consent can be challenging.
  3. Technical Barriers: Users may encounter issues with opening or reading PDF attachments.

Choosing the Right Agreement for Your Business

Selecting between traditional and wrap agreements depends on factors such as transaction nature, relationship dynamics, and risk levels.

Routine or mass-market transactions may benefit from the efficiency of wrap agreements, while bespoke or high-value deals may require the detailed negotiation of a traditional agreement. High-risk situations might necessitate the secure, tailored terms of traditional agreements.

Online businesses might prefer wrap agreements for seamless user interactions. Some transactions may by law require signature, in which case a traditional agreement would be suitable.

The decision to use a traditional signed agreement or a wrap agreement should be aligned with your business objectives and legal requirements. Get in touch if you would like to discuss what type of contract would best suit your business.

Related articles

Back to blog

Book a free consultation with one of our specialist solicitors.

We’ll start with a no obligation chat where we’ll get to know you and understand your current challenges.

Book your free consultation now

Looking for more information?

Explore our services Key industry sectors Briffa content hub