by Traverse Legal, reviewed by Enrico Schaefer - March 31, 2008 - q. E-Commerce Update: Clickwrap Contract Tips
The legal status of shrink wrap contracts in the US is somewhat unclear. One line of cases follows ProCD v. Zeidenberg which held such web contracts enforceable (see, e.g., Brower v. Gateway) and the other follows Klocek v. Gateway, Inc., which found the online contracts at hand unenforceable (e.g., Specht v. Netscape Communications Corp.), but did not comment on shrink wrap ecommerce 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 online 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, 356 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 sale of the copy, and thus not enforceable by either party without further "manifestation of assent" to its terms. In general, some web contract lawyers would note that the user is not 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.
As a founding partner of Traverse Legal, PLC, he has more than thirty years of experience as an attorney for both established companies and emerging start-ups. His extensive experience includes navigating technology law matters and complex litigation throughout the United States.
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.
