The Hong Kong Market Entry Playbook: Online Terms of Service

Hong Kong has a long history of being a business-friendly location to set up both as a regional business hub and to access the sophisticated local market. In the next of a series of articles exploring the attraction of Hong Kong as a regional and international business centre, Pádraig Walsh of Tanner De Witt explains key points of contract for online terms of service in Hong Kong.

Terms of Service: Online Terms of Service are usually uploaded on a company’s website or downloaded with an application, and provide the contractual terms for the use of the website in question and the online purchase of goods or services via the website or application.

Electronic contracts: Terms of Service often contain provisions in relation to the formation of contract and making payments via the website or application. In Hong Kong, the Electronic Transactions Ordinance is the governing law in respect of electronic contracts, and provides that contracting online is subject to the same requirements as contracting on paper. A contract will not be invalid or unenforceable on the sole ground that an electronic record was used to form the contract. As a matter of principle, electronic acceptance of contract offers is permitted under the Hong Kong law.

Click-wrap: Click-wrap acceptance of online terms occurs when the contracting party agrees with the Terms of Service by clicking a button or checking the “I agree” box. This commonly arises when the Terms of Service are displayed in a pop-up box in full or on a hyperlink. The general view is that clickwrap acceptance of Terms of Service is effective in Hong Kong, as active action is required from the user to confirm acceptance of the Terms of Service.

Browse-wrap: Browse-wrap acceptance of online terms occurs by notifying the online terms to the user, and deeming acceptance by their continued use of the website or application in question. The users are not required to actively agree to the Terms of Service, and there is no requirement that the user has to tick an “I agree” box. There is not a definitive guidance in Hong Kong law on whether browse-wrap acceptance is enforceable. The prevailing view is that, most likely, browse-wrap acceptance would not be valid in consumer contracts, and may not be valid in business-to-business contracts.

Electronic signatures: The Electronic Transactions Ordinance recognises the validity of electronic signatures, subject to limited exceptions, and adopts a technology neutral approach to what constitutes an electronic signature. The basic requirement is that the letters, characters, numbers or other symbols in digital form are attached to or logically associated with the electronic record of the contract, and were executed or adopted for the purpose of authenticating or approving the electronic record. In terms of business or sales contracts, generally, electronic signatures would suffice. 

Online payment: There is an active market for the provision of online payment services in Hong Kong. The provision of money service operations will require a licence in Hong Kong. Consequently, most online sellers will avoid directly conducting the online payment transaction, and will engage licensed third parties to conduct online payment services. Online payment services are provided by licensed banks, payment system operators, stored value facility operators and money service operators.

Pádraig Walsh

* This article is an expanded version of our contribution to the iTech Law global publication “Startup Legal Playbook”, which can be accessed on this link.

If you want to know more about the content of this article, please contact:

Pádraig Walsh

Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. This article was last updated on 18 March 2024.