RE: Consideration in a Shrinkwrap Contract

Now I see the point of difference. I'd hate to think that a court would hold that the consumer, having purchased the software and found himself unable to return it, would also be precluded from using it, and thus would simply have been screwed out of his money. I think most courts tend to be a little more consumer-friendly than that. But it's an interesting question that, as far as I know, remains unresolved.

Robert C. Cumbow
 Graham & Dunn PC
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 Seattle, WA 98101-2390
 206.340.9619
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 rcumbow[_at_]grahamdunn.com
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-----Original Message-----
From: Brad Englund [mailto:benglund[_at_]halversonlaw.com] Sent: Friday, October 27, 2000 2:07 PM
To: Multiple recipients of list
Subject: Re: Consideration in a Shrinkwrap Contract

Robert:

Perhaps I misunderstood your comments. I thought you were suggesting that if
the money-back option is unavailable because the store refused to return the money (notwithstanding the license agreement providing for the return of the money), the license terms inside the box would then become unenforceable.

It was that proposition that I was addressing. I believe that under those circumstances if the customer goes ahead and installs the program anyway, a court would hold that the customer has "accepted" the terms--rather than finding
that the customer is not bound by the terms.

Brad Englund
Halverson & Applegate, P.S.
Yakima, WA

Cumbow, Robert wrote:

> I don't see how this is a disagreement with what I originally said.
>
> <snip>
>
> 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
>

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