1. A brief history of Shrinkwrap license

2. What constitutes a binding contract?

The plastic wrap found around the software packet is called the shrinkwrap .Inside the shrink-wrap are user instructions accompanied with a license which proportes to grant the user permission to use the software subject to certain term and conditions in the license. Hence the name shrinkwrap likeness. The user is deemed to have accepted all the terms of the license by breaking and opening the shrink-wrap.

This paper will attempt to define what constitutes a valid contract. After which it will consider whether shrinkwrap licenses falls within the parameters of the definition. It will also look at the effect of legislation on these licenses

There are several methods a software producer might use to incorporate a Shrink-wrap license. One is to insert a paper containing the license into the software box. Another is to have the license printed on the back cover of the label of the software box and yet another method is to have the license appear on th

Common law lends little assistance in resolving the issue of shrinkwrap as precedent on the matter is scant. Thus, the need for additional legislation is necessary in order to clarify much of the ambiguity surrounding shrinkwrap agreements.

It has always been the basis of contract law that exclusion clauses cannot be added after the contract has been entered see Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163. This case indicates that valid acceptance need not be evidenced in writing verbally or by a physical act on the part of the customer provided the offeror has made a reasonable attempt to bring the terms of the agreement to the attention of the customer and the customer has had a reasonable opportunity to read such terms.

Because of its dominance in the electronic commercial market any legislation that affects the American software trade will ultimately affect the rest of the world.

The major users of the shrink-wrap license, the United States (where much of the litigation involving Shrink-wrap contracts originate) has enacted legislation in the form of the Uniform Commercial Code 2B which is to "reduce uncertainty and non-uniformity of licensing law" and "create balanced structure for electronic contracting".

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Approximate Word count = 4551
Approximate Pages = 18 (250 words per page double spaced)