Do you own or distribute a mobile App? Do you have an End User Licence Agreement (EULA) to govern use of that App? Follow these 3 tips to ensure the terms of that EULA are legally binding on your users.
We’ve all been there; scrolling through screen after screen of T&Cs to click “I Accept” so we can start using a particular software program. But what’s the legal reasoning behind this approach? And is it applicable to mobile App terms and conditions? First, some background. The type of licence we’re talking about goes by various names, including ‘click-through’, ‘click-wrap’ and ‘web-wrap’ licence. Basically, this just means a contract for use of software that is downloaded online or otherwise distributed electronically, where users are typically asked to accept the licence terms by clicking ‘ok’, ‘I accept’ or similar. The enforceability of this type of licence is relatively untested by the courts, but general contract law principles will apply. This means that to enforce such terms and conditions, you are required to show that “reasonable steps have been taken to bring the existence of such terms and conditions to the notice of the user before the transaction is concluded.” Given the compact nature of mobile device screens, the challenge to achieve this ‘notice’ requirement is arguably heightened. We’ve come up with a few tips which should help ensure your EULA passes muster.
How should you present your EULA to your App users? Should you simply link to the EULA terms which the user can choose to click if they wish to (as per Phone A)? Or, should you include all the terms of the EULA in their entirety, possibly in a scroll box (as per Phone B)? There’s not really a right and wrong answer to this. Arguably, the most ‘cautious’ way of meeting the ‘reasonable steps’ requirement mentioned above is the Phone B approach: to present the entire EULA and require the user to scroll through it before being able to accept and proceed. We understand, though, this is often viewed as cumbersome. The use of a hyperlink to the Terms (as per Phone A) is very common. It also allows you to update the linked EULA more easily, ensuring it is current. This is still legally binding on the user if done clearly, but it is a slightly less comprehensive approach. Be aware of the risk of a broken link too. Although reasonable steps may have been taken, a user could argue that he/she was not made aware of the existence of the actual terms and therefore is not bound by the terms of the EULA. Ultimately, the decision as to the best format for your mobile App EULA is about balancing user-friendliness against greater legal certainty.
Is the act of ‘acceptance’ clear? This should be a positive, deliberate act where the User indicates that they accept the EULA terms and conditions. Wording which directly links the “OK” or “Accept” button to the EULA is highly recommended. Any confusing, ambiguous or otherwise unhelpful language (such as a Maybe button!) should be avoided. To be clear that the User has a choice, you should also ideally give users an option to ‘reject’ the EULA terms and therefore leave the App.
If your EULA contains long or complex terms and conditions, you could think about creating an outline of the terms to be displayed at the top of the acceptance screen. This would have to be written carefully to ensure it did not contradict or otherwise detract from the actual terms. Also, any onerous terms should ideally be brought to the User’s attention at the beginning of the EULA. An example might be if you are looking to limit your liability to Users in any significant way. Lastly, it’s a good idea to allow Users to save the EULA or otherwise access it if they need to, possibly through the App settings or on a corresponding website.
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