A recent newsgroup posting (Newsgroups: misc.legal.moderated) posed the following question:
Does the disclaimer on the media envelope really work? ("By opening this envelope you agree that the vendor is not responsible for..otherwise send it back")?? I'd like to know of actual casespertaining to this, as we all have our opinions as to whether itshould or should not hold up, etc.
We answered:
This is in response to your question of January 26, 1996 regarding the value of "shrink-wrap" or media envelope type licenses.
These licenses are of questionable value and have been successfully challenged in court. The basic premise is that the purchaser was provided with no alternatives: he is told he must agree IF he wants to use the software. Courts have reasoned that this is not the sort of "meeting of the minds" agreement that contract law requires, and therefor there is no agreement.
Software houses have tried to find ways around this. Offer the customer the opportunity to get a full refund if he reads the license agreement and cannot agree to it. Put the essential terms (e.g., on the outside of the box with an indication there is a more complete license agreement on the inside. (By essential terms, most prominent in my mind is the limitation of liability.)
I represent several software houses that offer a variety of products. Some are off the shelf type products, where, despite my misgivings about the validty of the shrink-wrap, competitive forces result in most products still using the shrink-wrap. On the other end of the spectrum, the high dollar software applications aimed at business uses from which liability could result (e.g., automated mailing software, chip design software), I insist the customer obtain a signed written license agreement from the customer.
In some cases, as you are aware, the licensor requires the customer to send in a registration card or warranty card. Some companies, I remember Borland was giving away cruises, offer prizes for returning the card. This type of program was designed, in part, to obtain written confirmation of the customers agreement to the terms of the license included in the software package.
There is an excellent article on this exact subject in "The Software Developer's and Marketer's Legal Companion", authored by Gene K. Landy and published by Addison-Wesley. See Ch. 11., which concludes:
"From a legal perspective, a contract that is signed before the purchase is likely to be considered a binding bargain between the parties. If you are in a business that lends itself to contracting in advance, you can avoid the shrink-wrap license conundrum altogether.
"But, when you are selling through large-scale distribution, use a shrink-wrap license. It is not perfect --- and may not be legally effective --- but it surely doesn't hurt. It may help to deter claims and suits, and who knows, some judge might enforce it.
Thus, as in most legal inquiries, this one ends with the very unsatisfactory "it depends". You balance the risk of using the shrink-wrap with the practicality, for your particular software and marketing methods, of obtained a signed license agreement.
--EJL
Your thoughts, experience or comments on this issue are welcome at:ejosl@aol.com
Software License Issues of Today is published by Eric Lieberman, Wheaton, Illinois. Eric is a member of the firm of Huck Bouma Martin Charlton & Bradshaw, PC, and concentrates his practice in the area of computer and other intellectual property law. The ideas expressed here are intended to spark conversation and dialogue, and should not be understood to be legal advice that should be followed without further consultation with a qualified attorney.