"Click wrap" is a term that evolved from "shrink wrap agreement", which is the purchase agreement that is bound with the product by plastic wrap, and the agreement is made when the consumer opens the shrink wrap. So that in a click wrap agreement, the user typically is faced with a dialog box or pop up web page with the words, "I Agree" at the very beginning before using the product or service. This is also called an End User License Agreement or EULA.

EULAs accompany most software for sale that are either delivered in shrink wrap or sold over the internet. EULAs act as a software license as well as a contract between the producer and user to specify the limits of use granted by the owner to the user.

What Do EULAs Cover?

EULAs can include any of the following terms:

  • software licenses
  • rights of use
  • fees and payments
  • limitations of liability (for situations such as viruses, failure of the site to operate, or third party links). 

Are Click Wrap Agreement Enforceable?

Based on current law, click wrap agreements or EULAs are binding if the user:

  • was forced to view the agreement which includes any policies including warranty, shipping, complaints or returns
  • had to take some affirmative action to agree and is truthful in the information disclosed
  • was prevented from proceeding if he did not agree
  • had the option to return or to end use of the product and receive a full refund

Usually, retailers do not allow opened software to be returned for a refund, citing copyright issues. However, many companies are now accepting returns of opened software, and EULAs are provided on websites for consumers to read before committing to purchase software.

Breach of a Click Wrap Contract

Because of the nature of the internet, business has expanded globally. Therefore, it is likely that products and services are being traded on an international scale. In the event that a contract dispute arises, the agreement's terms come into play and can effect the consumer's rights.

When reading the click wrap license agreement, take note of the remedies for breach of contract since the law that will apply may be determined on a country by country basis. In the event a claim arises, an business attorney can advise you of your rights and the best course of action to pursue any possible remedies.