Clicking the “I Have No Idea What This Says” Button

Understanding the basic differences between Browse-wrap and Click-wrap Agreements

Welcome to the age of technology…where everything you do is pretty much online!  You meet people online, you keep up with loved ones online, you post comments online, download software online, you purchase  online, etc.  For every website platform you interact with there should be some sort of Terms of Service (TOS) or Terms and Conditions (TAC) that you will have to agree to.

So yeah, that little box that you checked quickly so that you could move on and see more information, or download your favorite song, etc., that stuff is the important stuff that you just AGREED TO that NO ONE ever really reads.  Well, except for maybe a few of us contract lovers and people looking for the “easter egg” of comical interruption alleged to be contained within the long winded legal mumbojumbo.  Turns out, at least in my experience, those allegations are fake.  Rarely do I see any humor in contracts.  I know…so BORING!

There are typically two different types of agreements – the Browse-wrap and Click-wrap.

THE CLICK-WRAP AGREEMENT

The more common agreement, the click-wrap agreement (also referred to as a “clickthrough” agreement or a “clickwrap license”), is the one that I generally referenced above.  It’s the agreement that actually requires you to take some sort of action, like clicking on an unmarked box, to show that you agree to the terms set forth by the website or platform.  If you think about it, the website is literally placing the website’s TOS right into your hands (for reading) and asking you to acknowledge the agreement by “clicking the box” or whatever other form that assent may come in.  If you want to refuse the agreement (who does that?) then one would cancel or  close the window to the subject website.  Courts typically uphold these kinds of agreements so remember when you are clicking you are probably entering into a legally binding contract.

THE BROWSE-WRAP AGREEMENT

Your browse-wrap agreement (also called a browserwrap or a browse-wrap license) is the other version.  Generally your browse-wrap agreement is located somewhere on the website; usually seen as a hyperlink at the bottom of the page to the TOS or TAC.  There is no “clicking” to manifest their agreement to the website’s terms.  The idea behind this is that by a person’s mere use of the website they agree to the websites terms.  Courts have been reluctant to uphold these types of agreements UNLESS the user has agreed to the terms.

BELT AND SUSPENDERS

Most websites these days, especially where they are interactive, will have BOTH a click-wrap agreement and a browse-wrap agreement tied to their website.  This is done so that the website can inform users of their website’s TOS/TAC but also, for legal contracting purposes, to aid in enforce-ability of those terms.  Contracts, in order to be upheld, require mutual manifestation of assent.

If you are a website owner, you want to be sure that your agreements are protecting your interests and you should consider seeking legal counsel on the matter if you have any questions.  Beebe Law, PLLC is an Arizona based law firm representing clients in the state of Arizona.

 

 

Advertisements

Online Negativity: A Potential Pitfall to Your Otherwise Perfect New Business Name

For many entrepreneurs, coming up with the right business name can be hard.  After all, you want it to be catchy and tell people what your business is about.  You might want some eye catching creative logo to go with it too.  You also want to be able to link that business name and logo with the internet, i.e., domain names, social media, etc.  Equally important is making sure all of these creative things (name, logo, etc.) are unique to you and your company, otherwise you could face intellectual property challenges down the road.  No one wants to make that costly mistake!  Perhaps you even engage an attorney to help ensure that all of these things are set up right and check out just to be sure.  When all of these things are on track you might feel like you have got the green light and you are off to the races!  Or are you?

One of the pitfalls I see in business is people starting businesses with a GREAT business name only to later find out that somewhere someone else has (or had) a same or similar business name with a bunch of negative online articles or reviews about it!  As many of us are aware, stuff on the internet stays around for a long time…as in forever in some cases. Basically, even if the business has long since been done and gone, those articles and reviews may still be around…possibly at the top of search engine listings.  Even worse, people who don’t pay that close of attention, perhaps prospective customers, might think that the old business name (and crummy article or review) that had nothing to do with you are one in the same with your business!  This is true even if you have different locations, different logos, and do totally different types of business!  Yes, a few unfortunate issues with our society (generally, not all) are: 1) people don’t typically read (they skim at best); and 2) people sometimes think everything on the internet is the truth without second guessing the information or where it came from!  Yikes!  Talk about a bad combination and potential for an online reputation nightmare for your new business – especially if your prospective customer doesn’t play that close of attention to details…like the fact that you aren’t that other business with the old articles, etc!  To top it off, solutions aren’t as easy as writing the websites that are hosting the articles/reviews and asking them to take them off.  In most cases, that won’t work and, generally speaking, they don’t have to.

PRO TIP:  When doing your due diligence for your business name, in additional to all of the intellectual property considerations, you should also consider running searches on top search engines like Google to see what, if any, negative information you can find on the internet using the name of your company and names closely related to your company, e.g. Frosty Ice Cream vs. Frostys Ice Cream, etc.  Going in with your eyes wide open as to what problems are present, if any, will help you determine if you want to consider other business names OR maybe at least consider some social media campaigns or other options that will help educate and differentiate you from the other(s).

If you not sure how to go about these kinds of searches, you are encouraged to speak with a Business Attorney in your area who can assist you or perhaps a trusted Reputation Management consultant (though do your research before you hire anyone).  Anette Beebe is the managing member of Beebe Law, PLLC which is an Arizona based law firm representing clients in the state of Arizona.

 

 

Contracts: The Hidden/Overlooked Master Agreement

I have had more people come to me, explain a situation, and then ask me if they have to perform a certain task as part of some agreement or argue that they didn’t intend to be bound by the agreement.  My response:  Do you have a contract and what does it say?  It sounds pretty cut and dry, but for some, this is a real struggle and often times people will gloss over the agreement, and sign it, without really paying attention to the terms.  If this is you, don’t feel bad, you are not alone.  Countless times I have had clients bring me a Scope of Work or Purchase Order and tell me “this is the agreement” to which I ask, “Where is the rest of it?”  You can imagine people’s confusion when I ask this question, especially when they think THAT is all there is.  Unless you are dealing with someone that doesn’t understand contracting, chances are, there is more…you just may have overlooked it.

MASTER AGREEMENT:  A Master Agreement is the main portion of the Agreement that often outlines what some all the “boilerplate terms.”  Most people overlook this section and don’t negotiate the terms.  However, you should not overlook the “boilerplate terms” because they can be very important.  The “boilerplate terms” often outline payment terms, duration of agreement and renewals (like automatic ones), warranties, choice of law/jurisdiction, dispute resolution, damages for failure to adhere to the contract, intellectual property rights, etc.  A person’s failure to overlook these types of terms can be detrimental if not carefully reviewed and considered.  If you are curious about what kinds of issues can be present in “boiler plate” contract language, you can read my prior blog post Contract Terms: The Boilerplate Language IS Important.

ORDER FORM:  The Order Form is typically the portion of the agreement that outlines the client/customer specific information which are typically negotiated between the parties. This is typically why it receives the most attention.  These documents typically incorporate by reference the Master Agreement (which might be provided as a simply link to a URL online).

  • PURCHASE ORDER:  A Purchase Order (“PO”) is commonly used where the Master Agreement contemplates a purchase/sale of goods.  This will typically outline the types, quantities and agreed upon prices for products and/or services that may be associated, payment method and scheduling for the same and method of shipping, and includes any special requirements or other miscellaneous that the Master Agreement may not contemplate or you otherwise negotiate for (such as a change of a term under the Master Agreement).
  • STATEMENT OF WORK:  Statement of Work (“SOW”) is commonly where the Master Agreement contemplates services to be provided.  This will typically define the scope of the activities to be completed, the location of the work to be performed, period of performance, itemize deliverables and what timeline exists in connection with those deliverables, pricing, payment method and schedule for the same, any standard regulatory or governance terms and conditions, and includes any special requirements or other miscellaneous that the Master Agreement may not contemplate or you otherwise negotiate for (such as a change of a term under the Master Agreement).

Unless you are a contracts attorney who loves the fine print (and maybe we don’t even really love the fine print but at least we can understand it) you may be tempted to only focus your attention on the Order Form document, however, as discussed it is incredibly important that you read through all of the terms of any Master Agreement in connection with any Order Form to make sure you don’t get caught off-guard.  It’s always good practice to inquire about a Master Agreement when presented with nothing more than a Order Form…and keep the two documents together.  Don’t just rely on the information you can read in a URL link because you never know when the Master Agreement at that URL will change.  It’s better to trust your own records than to rely on someone else!

If you are unclear as to whether or not the boilerplate language is appropriate for your situation, and you want to work through the issues, you are encouraged to speak with a Contract Attorney in your area who can assist you.  Beebe Law, PLLC is an Arizona based law firm representing clients in the state of Arizona.

 

Contract Terms: The Boilerplate Language IS Important

Every day people and businesses enter into contracts for one reason or another.  If you are running a businesses you likely have contracts that you have your customers/clients sign which outline the obligations of each party.  Most people only really consider the “meat” of the contract…you know, the who, what, where and when; but what about all of that “lawyery stuff” at the end?  Many people will put boilerplate language into their agreements without knowing what implications those clauses will have on them if either party fails to live up to the terms of the agreement.  Similarly, people will sign a contract without paying attention to all that “lawyery stuff” at the end because…well, it’s boring and can be hard to understand.  Does all that boilerplate language really mean anything?  Yes!  Especially if the person drafting the contract may have just cut and paste clauses off of something they found on the internet without really understanding how those things would be applied when things fall apart.

Sure, it seems easy to just cut and paste and/or use prior agreements and roll them over into a new situation…but it may cost you more in the long run if and when something goes wrong.

The boilerplate language at the end of your contract are important for a few reasons:

  • They are real contractual terms that have to be understood
  • They impact your legal rights as to the agreement
  • They can actually control or limit the enforcement of your contractual rights
  • They can, perhaps unintentionally, void portions of your contract that you might have already negotiated in your contract

What are some of the “boilerplate clauses” that are typically at issue in a contract?  The following are a few clauses that are important to review:

  • Choice of Law and/or Choice of Forum Clauses
    • These can define the law that will govern the contract which can get sticky if your contract is contrary to this clause.
    • These can define the place that the contract can be enforced which may or may not be favorable to you.
    • These may limit your rights to sue in certain kinds of courts.
    • These may subject you to a certain jurisdiction regardless of whether or not you happen to live or have minimum contacts with that particular jurisdiction.
  • Arbitration Clause
    • This is primarily used to discourage litigation by limiting the right to a trial through a traditional court system.
    • This can be more cost effective way to resolve disputes than going through a full blown litigation.  This is not always the case.
    • These can describe the specific process for proceeding through to arbitration which can be very different that a traditional court proceeding.
  • Jury Trial Waivers
    • A person needs to understand what exactly is being waived in by the clause.
    • A person needs to understand whether or not the clause will be enforceable in the state that the agreement is to be determined under.  Not all states would enforce this kind of a clause.
  • Severability Clauses
    • These usually say, generally, that if one clause or portion of an agreement isn’t enforceable then it is eliminated and all the rest of the contract is still in tact but some states won’t enforce it and therefore the entire clause could be void.
    • Sometimes these issues can be carved out specifically to protect the rest of the agreement.
  • Cooperation Clauses
    • These usually state that the parties are suppose to cooperate, etc. and it seems like it could be a good idea, however, one person’s cooperation might be another person’s demand for additional terms that aren’t in the agreement in the first place.
    • Sometimes these issues can be spelled out so that there isn’t unintentional consequences in the future.
  • Integration/Merger Clauses
    • Think about all of the prior communications and documents that are related to the agreement…is everything necessary and material in the actual agreement?
    • Have all representations that have been made the parties, agents of the parties, etc., all been incorporated?
  • Warranties
    • Is everything listed in the clause true?
    • Are you sure what the implied and express warranties are?
    • Do you need to limit any certain warranties?
    • How does the governing law handle warranties?
  • Damages Clause
    • Do you have a situation where you want to limit the damages?
    • Does the state law governing the agreement refuse to enforce the kind of limit you are trying to provide for in the contract?
      • Estimated damages or liquidation clauses need to be supported.
      • Penalty clauses that appear to be purely punitive (as punishment) are not likely to be enforced.
  • Indemnification Clauses
    • These are good for situations where some third-party might sue one of the parties of the agreement and the other party doesn’t want liability.
    • These are good to have so long as they are tailored to fit the governing law of the contract; are tailored to spell out who is indemnifying who for what; and outlines the process for getting notice of the indemnification, etc.
    • Certain claims cannot be covered by an indemnification clause.

If you are unclear as to whether or not the boilerplate language is appropriate for your situation, and you want to work through the issues, you are encouraged to speak with a Contract Attorney in your area who can assist you.  Beebe Law, PLLC is an Arizona based law firm representing clients in the state of Arizona.

 

It’s Tax Season! How is Your Business Classifying Independent Contractors and Employees?

 

There has always been a battle between the W-2 and the 1099 people who assist your business, however, the federal government and many states in need of additional revenue are starting to really crack down and audit businesses classifications – and hefty penalties can be associated with those (think back pay, taxes, liability for workers comp, company benefits including healthcare, fines and interest penalties). It’s certainly not pleasant to think about…and you will want to be prepared for a potential audit. As the old saying goes, it’s not a matter of IF, you will get an audit, but WHEN you will get an audit.

The IRS has a 20 factor test (Rev. Rul. 87-41 provides 20 common law attributes); the Department of Labor has an “Economic Reality Test” that touches on about 7 elements; and the State of Arizona likes to consider the totality of the circumstances and puts an emphasis on the right of control without any particular single factor being conclusive.

In this situation it is better to be proactive than reactive…it could save you $$$ and possibly even your business. Plus, there are some safe harbors and ways to help address the issue ahead of time that may save you big $$$.

If you aren’t sure whether you have your Independent Contractor classified correctly, and you are an Arizona resident/business, I can assist you in walking through the elements. You can also file an SS-8 Form to have the IRS make a determination for you. That form can be found at the following URL: https://www.irs.gov/uac/About-Form-SS8.