Shrink wrap contract
Encyclopedia
Shrink wrap contracts are license agreements or other terms and conditions of a (putatively) contractual nature which can only be read and accepted by the consumer after opening the product. The term describes the shrinkwrap
plastic wrapping used to coat software boxes, though these contracts are not limited to the software industry. Web-wrap, click-wrap
and browse-wrap
are related terms which refer to license agreements in software which is downloaded or used over the internet
.
A software license is commonly called an end user license agreement
(or EULA).
and Illinois in an attempt to address this issue, but parts of the Louisiana act were invalidated in Vault Corp. v. Quaid Software Ltd., and the Illinois act was quickly repealed. Case history also fails to clear up the confusion. One line of cases follows ProCD v. Zeidenberg
which held such contracts enforceable (see, e.g., Bowers v. Baystate Technologies
) and the other follows Klocek v. Gateway, Inc., which found the contracts at hand unenforceable (e.g., Specht v. Netscape Communications Corp.
), but did not comment on shrink wrap contracts as a whole. These decisions are split on the question of consent, with the former holding that only objective manifestation of consent is required while the latter require at least the possibility of subjective consent. In particular, the Netscape contract was rejected because it lacked an express indication of consent (no "I agree" button) and because the contract was not presented directly to the user (users were required to click on a link to access the terms). However, the court in this case did make it clear that "Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility." Specht, 306 F.3d 17.
It may be worth noting that the user in the Zeidenberg case had purchased and opened the packages of multiple copies of the product, and therefore could not easily prove he remained ignorant of the contract/license; whereas in many cases, the so-called shrink-wrap "license" agreement has not been reviewed at the time of purchase (having been hidden inside the box), and therefore is arguably not part of the implicit legal agreement accompanying the sale of the copy, and is thus not enforceable by either party without further "manifestation of assent" to its terms. In general, a user is not legally obligated to read, let alone consent to any literature or envelope packaging that may be contained inside a product; otherwise such transactions would unduly burden users who have no notice of the terms and conditions of their possession of the object purchased, or the blind
, or those unfamiliar with the language in which such terms are provided, etc. At the very least, the fair trade laws of most U.S. states would grant a buyer the right to cancel the purchase of a product where an enclosed contract provides terms of which purchaser can not be aware at the time the product is purchased.
Shrinkwrap
Shrink wrap, also shrinkwrap or shrink film, is a material made up of polymer plastic film. When heat is applied it shrinks tightly over whatever it is covering. Heat can be applied with a hand held heat gun or the product and film can pass through a heat tunnel on a conveyor.-Composition:The...
plastic wrapping used to coat software boxes, though these contracts are not limited to the software industry. Web-wrap, click-wrap
Clickwrap
A clickwrap agreement is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet, as part of the installation process of many software packages, or in other circumstances where agreement is sought using electronic media...
and browse-wrap
Browse wrap
Browse-wrap is a term used in Internet law to refer to a contract or license agreement covering access to or use of materials on a web site. Specifically, a browse-wrap license is expected or assumed to have been agreed to before a user browses the website...
are related terms which refer to license agreements in software which is downloaded or used over the internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
.
A software license is commonly called an end user license agreement
Software license agreement
A software license agreement is a contract between the "licensor" and purchaser of the right to use software. The license may define ways under which the copy can be used, in addition to the automatic rights of the buyer including the first sale doctrine and .Many form contracts are only contained...
(or EULA).
United States
The legal status of shrink wrap contracts in the US is somewhat unclear. In the 1980s, software license enforcement acts were enacted by LouisianaLouisiana Software License Enforcement Act
The Louisiana Software License Enforcement Act refers to the Software License Enforcement Act adopted by the state of Louisiana. The bill was voted into law in September 1984 under Title 51 of the Louisiana Revised Statutes by the Louisiana State Legislature...
and Illinois in an attempt to address this issue, but parts of the Louisiana act were invalidated in Vault Corp. v. Quaid Software Ltd., and the Illinois act was quickly repealed. Case history also fails to clear up the confusion. One line of cases follows ProCD v. Zeidenberg
ProCD v. Zeidenberg
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 , is a United States contract case involving a "shrink wrap license". One issue presented to the court was whether a shrink wrap license was valid and enforceable. Judge Easterbrook wrote the opinion for the court and found such a license was valid and...
which held such contracts enforceable (see, e.g., Bowers v. Baystate Technologies
Bowers v. Baystate Technologies
Bowers v. Baystate Technologies was a U.S. Court of Appeals Federal Circuit case involving Harold L. Bowers and Baystate Technologies over patent infringement, copyright infringement, and breach of contract...
) and the other follows Klocek v. Gateway, Inc., which found the contracts at hand unenforceable (e.g., Specht v. Netscape Communications Corp.
Specht v. Netscape Communications Corp.
Specht v. Netscape, 306 F.3d 17 , is a case in the United States Court of Appeals for the Second Circuit regarding the enforceability of browse-wrap software licenses...
), but did not comment on shrink wrap contracts as a whole. These decisions are split on the question of consent, with the former holding that only objective manifestation of consent is required while the latter require at least the possibility of subjective consent. In particular, the Netscape contract was rejected because it lacked an express indication of consent (no "I agree" button) and because the contract was not presented directly to the user (users were required to click on a link to access the terms). However, the court in this case did make it clear that "Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility." Specht, 306 F.3d 17.
It may be worth noting that the user in the Zeidenberg case had purchased and opened the packages of multiple copies of the product, and therefore could not easily prove he remained ignorant of the contract/license; whereas in many cases, the so-called shrink-wrap "license" agreement has not been reviewed at the time of purchase (having been hidden inside the box), and therefore is arguably not part of the implicit legal agreement accompanying the sale of the copy, and is thus not enforceable by either party without further "manifestation of assent" to its terms. In general, a user is not legally obligated to read, let alone consent to any literature or envelope packaging that may be contained inside a product; otherwise such transactions would unduly burden users who have no notice of the terms and conditions of their possession of the object purchased, or the blind
Blindness
Blindness is the condition of lacking visual perception due to physiological or neurological factors.Various scales have been developed to describe the extent of vision loss and define blindness...
, or those unfamiliar with the language in which such terms are provided, etc. At the very least, the fair trade laws of most U.S. states would grant a buyer the right to cancel the purchase of a product where an enclosed contract provides terms of which purchaser can not be aware at the time the product is purchased.
See also
- Boilerplate contract
- Data General Corp. v. Digital Computer Controls, Inc.Data General Corp. v. Digital Computer Controls, Inc.Data General Corp. v. Digital Computer Controls, Inc. was a 1971 case in which the Delaware Court of Chancery determined that widespread, confidential disclosure of trade secrets does not necessarily compromise their secrecy...
- Electronic signatureElectronic signatureAn electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it . By comparison, a signature is a stylized script...
- Electronic Signatures in Global and National Commerce ActElectronic Signatures in Global and National Commerce ActThe Electronic Signatures in Global and National Commerce Act is a United States federal law passed by the U.S. Congress to facilitate the use of electronic records and electronic signatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered into...
(ESIGN) - SoftMan Products Co. v. Adobe Systems Inc.SoftMan Products Co. v. Adobe Systems Inc.SoftMan Products Co. v. Adobe Systems Inc. was a lawsuit heard in the U.S. District Court for the Central District of California in 2001 by Judge Dean D...