The Perils of Click-Through Agreements

The use of click-through agreements has been on the rise in recent years, with more and more companies incorporating them into their online contracts and terms of service. Click-through agreements are essentially a type of contract that requires users to agree to terms by clicking a button or link, rather than signing a traditional written document. Quickly scrolling through the contracts and clicking “Accept” can lead to significant economic peril, as many of the users of Celsius Network recently found out.

One of the main reasons for the increasing use of click-through agreements is the convenience they offer. It is much easier for companies to have users agree to terms by clicking a button than it is to have them sign a physical document and mail it back. Click-through agreements also make it easier for companies to update their terms and conditions, as they can simply post the updated version online and have users agree to the new terms by clicking a button.

However, the use of click-through agreements has also raised concerns about consumer protection and the enforceability of these types of agreements. Some critics argue that it can be difficult for users to fully understand the terms they are agreeing to, as they may be presented with a long and complex legal document that is difficult to read and comprehend. There have also been cases where companies have been accused of burying important terms in the fine print or using manipulative tactics to get users to agree to terms without fully understanding them.

On Wednesday, January 4, 2023, a U.S. bankruptcy judge made a landmark ruling in the case of Celsius Network, stating that the cryptocurrency lending and borrowing platform owns most of the cryptocurrency deposited by its customers. This decision, which was based on the click-through terms of deposit agreed to by customers, highlights the importance of reading and understanding contracts, regardless of whether the contract is for a consumer transaction or a business transaction.

In the case of Celsius Network, customers claimed ownership of the deposited cryptocurrency during the company’s bankruptcy proceedings, while Celsius argued that the terms of the deposit agreement granted them ownership. The judge ultimately sided with the company, stating that the terms of the agreement were clear and that customers had the opportunity to review and accept or reject them before using the platform.

Whether entering into a consumer transaction or a business deal, ignoring or skimming over the fine print can have serious consequences. In the case of Celsius Network, customers who did not take the time to fully understand the terms of the deposit agreement lost ownership of their cryptocurrency.

The ruling in the Celsius Network case serves as a reminder to always read and fully understand any contracts or agreements, whether for personal or business purposes. Failing to do so can be a trap for the unwary, leading to costly mistakes or unexpected consequences. To learn more about click-through agreements, call our office today.