Click-wrap contracts are commonly used online and rarely thought about by anyone involved in the contracting process. There is an assumption that by clicking on a box a consumer or user is bound by the terms but is this assumption correct?
The English Court of Appeal has called for a review of the law on click-wrap procedures, in its ruling in a case concerning a National Lottery game.
In her March 2024 judgment dismissing the game player’s appeal in Parker-Grennan v Camelot UK Lotteries Ltd, Lady Justice Andrews said:
“the issues in this case have highlighted the complexity of balancing the needs of traders to publicise their terms and conditions with the needs of consumers to access and understand those terms. Given that a decade has passed since the last report of the Law Commission the time might be ripe for another, evidence based, review of this area of law.”
Interactive Win Game
The case concerned Camelot’s terms and conditions and whether these were adequately brought to the attention of consumers.
It arose when Mrs Parker-Grennan played Camelot’s online Interactive Win Game, which offered prizes of up to £1 million, in August 2015.
Due to a software error, which affected 0.24% of plays in a 36-hour period before it was detected, Mrs Parker-Grennan saw two matching number 1s on her laptop screen (see screenshot), which would mean she had won £1 million. However, when she clicked “Finish”, she was told she had in fact won £10.
Mrs Parker-Grennan brought proceedings against Camelot and applied for summary judgment/strike out. After the first instance judge found in favour of Camelot, she appealed on three issues.
Click-wrap: Incorporation, enforceability and construction
The first issue was whether Camelot’s terms were incorporated in the contract with Mrs Parker-Grennan. To open a National Lottery account, a user must perform a click-wrap procedure confirming that they have read all the relevant terms. They also have to accept updates when they are made by clicking a button marked “Accept”.
Andrews LJ said she agreed with the judge that “there was nothing onerous or unusual about the various contractual provisions on which Camelot sought to rely” and “there was no requirement for Camelot to specifically signpost any of the relevant terms in order to incorporate them into the contract as a matter of common law”.
She said a player would expect a game to have rules and the appellant accepted those terms through the click-wrap procedure.
However, she also stated that following the click-wrap procedure would not be sufficient to incorporate all the standard terms and conditions in every case of an online contract for goods or services, saying:
“I can envisage situations in which, for example, the website remains open for a transaction for such a limited period of time that in practice the consumer would not have a sufficient opportunity to read and digest all the standard terms and conditions (if they desired to do so) as well as to conduct the transaction; or the consumer is required to click onto so many different hyperlinks in order to find the relevant terms that it cannot truly be said that they are readily or easily accessible.”
The second issue was whether any of the terms were rendered unenforceable by the Unfair Terms in Consumer Contracts Regulations 1999. The Court affirmed the judge’s finding that the network of contractual provisions on which Camelot relied were clearly drafted and well signposted through the various hyperlinks. The rules made it plain that “the question whether a player had won or lost was straightforward and binary, because what was crucial was what appeared on Camelot's official list”.
Finally, as a matter of construction, the Court found that Mrs Parker-Grennan had only won £10 and not £1 million. Andrews LJ said it should have been obvious to any reasonable player of the game that only one prize could be won per play; winning numbers would turn white and flash; the amount of the win would be displayed; and this would be confirmed when the “Finish” button was pressed.
What does this mean?
The judgment is the first in which the Court of Appeal has addressed how companies incorporate standard terms and conditions into a contract for goods or services made online.
While it upheld the principle of click-wrap procedures, the Court also recognised that the position might be more difficult in other cases:
“The present case concerns a large consumer-facing company operating in a regulated environment, whose terms and conditions, standing back, are not unduly complex or controversial and are written in plain, comprehensible English. However, the Court is well aware that there are many companies, organisations and entities which operate at the other end of the spectrum from Camelot, and whose terms and conditions are complex and opaque and not, in truth, designed to be read or understood. These may contain, lurking within their hidden depths, many pitfalls highly disadvantageous to the consumer.”
We will monitor and report on any further developments in this area. If you have any questions in the meantime, please do contact us.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com