Tag: Business lawyer

Best Practices for Drafting Browsewrap and Clickwrap Agreements

Internet Law, Online Agreements

There’s still some hostility from the court system, and the public at times, on the enforceability of browsewrap and clickwrap agreements. Having an enforceable license for your website, software or mobile application is of the utmost importance.

The ABA Committee on Cyberspace Law provided general rules to ensure your online agreement is enforceable:

  1. The user must have adequate notice that the proposed terms exist;
  2. The user must have a meaningful opportunity to review the terms;
  3. The user must have adequate notice that taking a specified, optional action manifests assent to the terms; and
  4. The user must, in fact, take that action.

I fully agree with the above.  Notice, notice, notice is so important. But not just any notice.  You need to ensure that the notice is reasonable, that is that a reasonable person using your software/website/application would understand that by taking a certain action (clicking or continuing use of the site) it renders the agreement binding on them. My reading of the case law on shrinkwrap, browsewrap and clickwrap agreements made me come up with my own list in addition to the ABA Committee’s pointers:

  1. Create an easy to read, reasonable license that follows industry norms;
  2. Give the user reasonable notice that the license exists;
    • Make sure the notice is CLEAR AND CONSPICUOUS
    • Colors, size, font, placement, timing, etc. all relevant. Don’t “bury” it.  Get it in front of the user’s faces.
  3. Let the user read the full license if he or she so chooses (scrollable pop-up being preferred), prior to acceptance (click or use);
  4. Opt for clickwrap over browsewrap if possible.

 

 

Clickwrap and Browsewrap Agreements Kickoff

Copyright, Intellectual Property, Internet Law

I’ve been involved in drafting numerous versions of online agreements, including privacy policies, service agreements, pricing policies, various other policies and last but not least both browsewrap and clickwrap agreements.  I’ve done a quick post on case law with respect to browsewrap and clickwrap agreements in the past, and was recently asked to speak for a webinar entitled Drafting Clickwrap and Browsewrap Agreements: Advanced Strategies for Enforceable Online Contracts held by Strafford.  If you’d like to listen to the webinar email me or contact them.

I feel that more and more contracting is going to be done over the Internet in the future and I am going to start a series of blog posts on drafting these types of browsewrap and clickwrap agreements as well as case law in the area, which serves to let corporate lawyers know how they have to draft the agreement, and have the users accept it. Read more

Use your Retirement Plan to Fund your Startup

Business Entity Formation, Financing Your Business, Startup Formation, Stock, Tax

First of all, I won’t advise anyone to withdraw their 401(k) funds early as the tax hit the IRS enacts is insane.  If you are thinking about doing that, please don’t, or at least don’t do so until you’ve spoken to your accountant.

This post will, however, detail how to use your qualified retirement plan or IRA to start a new, or buy an existing, business.  This name given to the process I’ll discuss is rollovers as business startups (“ROBS”).  The main gist is that an individual’s current retirement plan is rolled over into a newly established 401(k) plan sponsored by a startup company and then used to purchase the startup company’s stock.  The ROBS arrangement allows income taxes and penalties (see IRC Section 72(t))to be avoided because it is a rollover from one qualified plan to another. Read more

Ten Tips for Pitching your Startup to Investors

Accredited Investors, Angel Investors, Financing Your Business, Investors, Securities, Venture Capital

I volunteer at a couple of small business incubators and programs.  I was sitting in on a mock pitch last week and giving some pointers on how the entrepreneur could polish their pitchdeck and overall presentation. I figured I’d put these up so people can take a look.  The below are offered to any startup looking to raise money: Read more

Securities Laws as applied to Virtual and Online Items

Securities, Stock

There’s been a lot of discussion about whether online or virtual accounts can be deemed securities under the U.S. federal securities law.  The most well known at the moment is Bitcoin.

A case was just decided where the court found that Bitcoin was a currency.  Based on that fact, and that the protaganist in the case was offering a money making scheme (you put in money, wait and make more money off Bitcoin), the scheme was subject to the securities laws.   We’ll have to parse out the holding.  The court did not hold that the Bitcoin itself is a security, but rather that Bitcoins are a type of currency – because they can be converted into currency (which I’m not sure I agree with – any commodity, product or item can somehow be converted to currency – and the distinction between selling and converting seems like a big deal). Here’s the link to the case, its actually rather short and sparse on legal analysis for one that makes such huge leaps in legal doctrine as applied to a concept which the court is probably not overly familiar with.  The old adage that bad facts make bad law seems to be the culprit again, as the scheme the guy in Texas was attempting to pull off was not something a judge would let him off on.

I’m pretty sure this isn’t the last we’ve heard of the SEC v. Bitcoin debate.  Mark it up as SEC 1, Bitcoin 0 so far, unfortunately.

I’ll give a breakdown of the securities laws and how they could be, and have been, applied to virtual goods, online items, and currency, including Bitcoin (which I’m not conceding is technically a currency). Read more