US Internet Law/Clickwrap Agreements

Click-wrap/Shrink-wrap/Download Licenses

A shrink-wrap license is generally associated with “off the shelf” software in which the license agreement is contained within the software packaging materials. It is in a standard printed form, and is accepted by the customer when the customer carries out a specified task, such as opening the envelope or the shrink-wrapping containing the CD-ROM (breaking the seal while doing so) or by installing the software.

A variation is to accept the terms of the onscreen license presented during the setup process before the software is installed on the computer. If the license terms are not accepted, the software will not install. This is referred to as click-wrap. Frequently, the on-screen acceptance is in addition to the software being delivered in a shrink-wrap but as more and more software is preloaded, the click-wrap methodology performs an important function.

Increasingly, software can be downloaded from Internet websites. In such cases, it would be normal for a customer to be presented with an onscreen license agreement, which can either be accepted or rejected. If not accepted, the software will not download.

The license terms should be presented to the potential customer before the purchasing mechanics take place. This would ensure that they are effective.

A web-wrap license is considered an Internet contract that asks that user to accept the terms of the license by clicking a “yes” or “no” button before or after seeing the complete agreement. A “yes” gives the user complete access to the website. A “no” prevents the user from gaining access to all or some of the information on the site. This is also known as a click-wrap license.

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