The term "shrink wrap agreement" refers to the purchase agreements that are attached to shipped products, usually bound by shrink wrap (plastic wrapping) that contain terms and conditions. Shrink wrap agreements can include the following terms:
rights of use
fees and payments
limitations of liability.
The controversy around shrink wrap agreements is the fact that the terms of the agreement cannot be read until the consumer has paid and accepted the package, and has opened the product by taking off the shrink wrap, which then states that opening will constitute acceptance of the terms.
Currently, the status of shrink wrap agreements is unclear. Courts have been split as to whether a consumer consents to the terms in a shrink wrap agreement since he pays for the product and goes so far as to open the package, but does not have actual knowledge of what the terms are until he opens the package to read them.
When software is purchased, it is usually shrink wrapped and the terms and conditions are made available either inside the container or, during the process of downloading it is accompanied by an End User License Agreement (EULA). EULA is a software license which also acts as a contract between the producer and the user of the computer software to specify the limits of use granted by the owner. The EULA is in effect immediately at the time of purchase regardless of how or when it was installed.
Recent court decisions have challenged the use of EULAs within shrink wrapped software, and multiple complaints have forced some software companies and retailers to accept returns of opened software, or to provide EULAs on their websites for consumers to read before purchasing.
Because the law surrounding shrink wrap agreements is uncertain, contacting an experienced business attorney can help you make certain what your rights and remedies are when you are a party to a shrink wrap agreement and you believe you may have a claim.