Shrinkwrap Agreement – Definition

Cite this article as:"Shrinkwrap Agreement – Definition," in The Business Professor, updated May 1, 2019, last accessed October 21, 2020,


Shrinkwrap Agreement Definition

Shrink Wrap agreement can be defined as a legal agreement, purchase agreement or an undertaking made on packaged or shipped products. In this type of agreement, products are sealed or enclosed in shrink wrap (plastic wrap) implying that the goods can only be viewed by the customer who purchases it. Shrink wrap products can only be opened by a user after purchase. Also, Shrink wrap agreement may also include specific terms and conditions such as price of products, warranties, right of use and guideline, limitations and licenses as the case may be.

A Little More on What is a Shrink-wrap Agreement

Shrink Wrap agreement has given rise to many debates and controversies such as the inaccessibility of terms of the agreement before purchase of product. One of the features of a shrink wrap agreement is that a consumer or customer cannot read its terms of agreement until the package has been accepted and paid for. It is when the shrink wrap is opened that a customer can read this and once it is opened, it means all the terms of agreement are suitable for the customer.

Whether shrink wrap agreements are enforceable or not has remained a constant and controversial topic even the court of law. Many studies have been done as to whether a customer automatically accepts the terms of a shrink wrap agreement upon payment or not. Both scholars and reaearchers are pitched in different tents on this issue. While some courts agree that a consumer consents to the terms in a shrink wrap agreement since he pays for the product, accepts the product and even opens the package. Others are of the opinion that the consumer could not have consented to the terms since he has no knowledge of what the terms stipulate until the shrink wrap is removed.

End User License Agreement (EULA) is a software license that serves as an undertaking between the producer of a software and the user. EULA contains terms and conditions of the product, its limitations, warranties and other conditions granted by the producer. Although, softwares have EULA tag when they are purchased, in most cases, they are usually shrink wrapped. This means that their terms and conditions can only be known after purchase or when the software is being downloaded. The use of EULAs within shrink wrapped software has been challenged by some courts due to the incessant complaints of buyers. There have been cases where software companies had to accept returns of opened software despite the softwares being shrink wrapped.

In United States, the position of the court on whether shrink wrap agreements are enforceable or not are quite unclear. While some cases follow ProCD v. Zeidenberg which held shrink wrap contracts enforceable, others follow Klocek v. Gateway, Inc., which found the contracts at hand unenforceable. There have been several legal attempts to address shrink wrap agreement in line with consumer’s consent but the decisions of the court are split. Hence, there is no clear ground on the legal status of shrink wrap contracts or agreements in the United States.

References for Shrinkwrap Agreement

Academic Research on Shrinkwrap Agreement

Intellectual property and shrinkwrap licenses, Lemley, M. A. (1994). S. Cal. L. Rev., 68, 1239.

Shrinkwrap and Clickwrap agreements: 2b or not 2B, Founds, G. L. (1999). Fed. Comm. LJ, 52, 99.

Shrinkwrap license agreements: new light on a vexing problem, Hayes, D. L. (1992). Hastings Comm. & Ent. LJ, 15, 653.

The Death of Copyright: Enforceability of Shrinkwrap Licensing Agreements, Minassian, A. (1997). UCLA L. Rev., 45, 569.

Mass Market Software and the Shrinkwrap License, Rich, L. L. (1994). Colo. Law., 23, 1321.

Shrinkwrap licenses: the debate continues, Einhorn, D. A. (1997). Idea, 38, 383.

Will Shrinkwrap Suffocate Fair Use, Morris, E. (2006). Santa Clara Computer & High Tech. LJ, 23, 237.

Shrinkwrap, click-wrap, now browse-wrap, Pike, G. H. (2004). Shrink-wrap, click-wrap, now browse-wrap.

Mass Marketed Software: The Legality of the Form License Agreement, Kemp, D. (1987). La. L. Rev., 48, 87.

The Shrinkwrap Snafu: Untangling the Extra Element in Breach of Contract Claims Based on Shrinkwrap Licenses, Smith, N. (2003). BYU L. Rev., 1373.

Shrinkwrap licenses of mass marketed software: Enforceable contracts or whistling in the dark, Stern, R. H. (1985). Rutgers Computer & Tech. LJ, 11, 51.

Contracts, Copyright, and Confusion-Revisiting the Enforceability of Shrinkwrap Licenses, Heath, S. A. (2005). Chi.-Kent J. Intell. Prop., 5, 12.

Restricting Reverse Engineering Through ShrinkWrap Licenses: Bowers v. Baystate Technologies, Inc., Bressman, S. (2003). BUJ Sci. & Tech. L., 9, 185.


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