Cases on Shrink Wrap Agreement and Click Wrap Agreement

Case on Shrink wraps Agreement:-

Pro CD vs Zeidenberg 980 F Spp. 640 (W. D Wis 1996)  

In this case it was held that a shrink wrap agreement violates a basic notion of contract law that both parties have to know what they are agreeing to. This decision was overturned on its appeal to the U.S 7^th circuit court of appeals (86 F. 3^rd 1447) 1996.

According to the 7^th circuit shrink wrap licenses to be enforceable because they have the beneficial effect of reducing the cost of software for consumers.

The court of Appeals decision also upheld the validity of the shrink wrap license in the question the Pro CD Case, because the license allowed the purchaser to return the software if the terms and conditions of license were un acceptable.

Indian court however emphasizes reasonable notice of the terms of the contract for the terms to be binding.

Case on Click Wrap Agreement:-

In the case of Caspi vs The Microsoft network L.L.C Supreme Court of New Jersey Appellate Division 1999 N.J. Super Lexis 254 (July 2 1998).

Validity of click wrap license was examined.

Before becoming an MSN member; a prospective subscriber is prompted by MSN software to view multiple computer screens of information, including a membership agreement which contains the above clause. MSN’s membership agreement appears on the computer screen in a scrollable window next to the block providing the choice “I Agree and I don’t Agree”.

Prospective members assent to the terms of the agreement by clicking on “I Agree” using a mouse. Prospective members have the option to click “I agree or I don’t Agree” at any point while scrolling through the agreement.

Registration may proceed only after the potential subscriber had the opportunity to view and have assented to the membership agreement; including the MSN’s forum selection clause. No charges are incurred until after the membership agreement review is completed and a subscriber has clicked on “I Agree”.