Re: Consideration in a Shrinkwrap Contract

Cumbow, Robert wrote:

> I'm not sure, not claiming to be an expert in such matters. But it seems to
> me if the money-back option is unavailable then the customer has lost the
> ability to accept or decline the terms, thus providing him with a pretty
> good argument that the terms are unenforceable. I'd be interested in others'
> opinions, though.

I disagree. In Brower v. Gateway 2000, Inc., 246 A.D.2d 246, 250, 676 N.Y.S.2d 569 (1998), the court held that a shrink-wrap contract between the parties was not formed until after the period had run to return the merchandise. Thus, if a consumer attempts to return the software and the store refuses to return the money, no contract ever formed. Which means that the sale fails for lack of consideration. Alternatively, a contract has been formed, but the vendor has violated the perfect tender requirement, and the consumer can refuse tender of the software.

In either case, consumer can sue to get his or her money back. However, the consumer cannot use the software in violation of the shrink-wrap agreement (except, perhaps, in a "cover" situation). Using the software after the store refuses to return the money (except in a cover situation) may be considered "acceptance" of the software. In that event, the consumer's sole remedy will be to sue for the damages caused by the imperfect tender (i.e, those damages that flow from the license terms that prohibit a use that the consumer intended).

Brad Englund
Halverson & Applegate, P.S.
Yakima, WA Received on Mon Oct 23 2000 - 17:42:47 GMT