Click-Wrap, Shrink-Wrap, and Web-Wrap Agreements • 89
WHAT IS A “SHRINK-WRAP” LICENSE?
e term “shrink-wrap” derives from the method by which soware was
distributed as a package of installation disks and associated documenta-
tion sealed inside shrink-wrap cellophane. e accompanying end user
license agreement was oen itself packaged in shrink-wrap cellophane
and placed on the outside of the package or included as the topmost item
in the package. Today, shrink-wrap agreements can take a variety of forms
and are found in both soware and hardware acquisitions. However, they
all have a common structure: essentially non-negotiable terms and condi-
tions that accompany the product. e terms may appear as part of the
documentation accompanying the product, as part of an online purchase
process whereby the terms are displayed (and the purchaser, potentially, is
required to armatively click an “accept” button as part of the process),
or presented to the purchaser on rst use of the application as part of the
If the terms are displayed electronically, either online or in connection
with the installation process, they are oen referred to as “click-wrap”
terms. For purposes of this discussion, there is no dierence between
click-wrap and shrink-wrap terms.
Courts in the United States have almost uniformly found that these
types of agreements are enforceable (see, e.g., Conference America Inc. v.
Conexant Sys. Inc., M.D. Ala., No. 2:05-cv-01088, 9/10/07). In fact, courts
have held them enforceable even if the customer failed to read them (e.g.,
Druyan v. Jagger, S.D.N.Y., No. 06-cv-13729, 8/29/07).
PRODUCTS PURCHASED UNDER SHRINK-
WRAP AGREEMENTS—COMMON ELEMENTS
While there are no bright-line rules as to the specic types of products
that are made available under shrink-wrap agreements, the following are
• e product typically has a relatively low cost per unit (e.g., less than
$20,000). While the cost per unit for a given product may be low, or
even trivial (e.g., less than $100), the total cost to the organization