We encounter them almost every day—and we check the box and click “I Agree” without hesitation. But what does our “agreement” really mean?
Since the advent of the internet, consumers have been presented with “clickwrap” and “browsewrap” agreements and terms and conditions when browsing websites or downloading online applications. Now that the internet has come to our cars, which generate, collect and transmit huge amounts of data, we are seeing a new variation on the same theme—what we call the “drivewrap” agreement.
It’s easy to see the appeal of presenting drivers with drivewrap agreements through the vehicle’s in-dash display. The prospect of having consumers authorize the use of their data, release future claims of negligence and submit to binding arbitration in case of a dispute, is attractive to OEMs and suppliers alike.
Suppliers who develop complete solutions, or who collaborate with OEMs or software providers through a joint development agreement, already face a risk of being targeted in product litigation, thanks in part to deepening pockets and the presence of advanced data recorders that can more reliably isolate the cause of a crash. The advent of automated driving components that supplant the human driver’s role in any given accident will only accelerate that trend. For suppliers looking to minimize their exposure to this growing risk, drivewrap agreements can offer some relief.
Not all drivewrap agreements are created equally, though. The legal enforceability of such terms depends on the way they are presented, the content of the particular provision at issue and even the consumer’s home state. For example, terms releasing the supplier or limiting its liability for claims that have not yet arisen would be more strictly construed than, say, a term that authorizes the collection of data from the vehicle.
Legal enforceability aside, companies opting to use clickwrap in vehicles may face public outcry. Facebook experienced significant backlash in 2014 when it relied on its data use policy to defend its controversial social engineering experiment conducted on hundreds of thousands of users’ newsfeeds. While the experiment was almost certainly legal and Facebook has not faced litigation over the issue, the public relations mess underscores the need for caution when using drivewrap terms with consumers.
We recommend the following best practices for any supplier using a drivewrap agreement:
- Don’t let the user activate the feature(s) governed by the terms unless the user shows clear assent.
- Do include a check-box with a statement indicating that by checking the box, the user affirms it has read and agrees to the terms and conditions.
- Don’t use small font or require the user to navigate to a separate page to access the terms; instead include them in a scrolling text box on the same screen as the check-box.
- Do draft the terms to be as clear, definite and user-friendly as possible; use all-caps and/or boldface type to draw attention to the most important terms, such as a release of claims or disclaimer of warranty; and consider providing a summary of material terms.
At Warner Norcross & Judd, we have a dedicated team of attorneys helping automotive suppliers and technology companies of all sizes navigate the complex legal challenges and opportunities presented by advances in automotive technology. For more information about how you can effectively limit your liability to automotive consumers for product liability claims, contact a member of our Automotive Industry Group.