Re: Consideration in a Shrinkwrap Contract

From: Bryan Taylor <bryan_w_taylor[_at_]yahoo.com>
Date: Thu, 5 Oct 2000 13:19:34 -0700 (PDT)

• fwilf[_at_]morganlewis.com wrote:
  > As for shrinkwrap and clickwrap agreements, I personally agree with
  > the analysis in the _Step-Saver_ case. If the terms of the license
  > are inside the box, and are not seen by the user prior to the
  > user paying for the goods, the license agreement is not
  > effective because the user has not bound herself to it. Absent
  > other circumstances, no bailment is created,
  > and the transaction is similar to the sale of a book or audio CD.
  

Step-Saver said something to the effect of: the willingness of the vendor to proceed with the transaction without express assent by the buyer indicates a willingness to proceed under the terms expressly agreed to.  

> By contrast, where a clickwrap agreement is placed in front of the
> user prior to clicking on "I Agree," I think the user is bound to the
> terms of the agreement.

It still depends. If it's a situation like that in the Hotmail case, yes, because the act of clicking is sent back to the vendor and verified before proceeding. In the case of an installer-from-CD program, I would think the exact same reasoning of Step-Saver would apply.

> Now that UETA is effective in 20+ states, and E-Sign is in
> effect throughout the US, clicking on "I Agree" binds the user to the
> terms of the contract as a signature.

I haven't read the E-sign bill, but surely there is some form of authentication and non-repudiation elements that require more than anonymous clicking of a button. I don't think this is really the issue, though, since many contracts don't require signatures -- any verifiable expression of assent will do. The issues are consideration, adhesion contract unconscionability, contract modification, and Federal preemption by the Copyright Act.

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