Legal Definitions - shrink-wrap license

A shrink-wrap license is a type of legal agreement, most commonly associated with software, whose terms and conditions are enclosed within the product's packaging. The name comes from the plastic shrink-wrap often used to seal physical software boxes. The core idea is that a consumer implicitly agrees to the license terms by opening the package, installing the software, or using the product, even though they may not have seen the full terms before purchasing the item.

Here are some examples to illustrate how a shrink-wrap license works:

• Example 1: Physical Software Purchase

  Imagine a customer purchases a new computer game from a retail store. The game box is sealed with plastic shrink-wrap. Inside the box, there's a disc and a small booklet that states, "By opening this package or installing the software, you agree to the End-User License Agreement (EULA) contained within or accessible during installation." The customer takes the game home, breaks the seal, installs the game, and begins playing.

  This illustrates a shrink-wrap license because the full terms of the EULA were not visible at the point of sale. The act of breaking the physical seal on the box and proceeding with installation is considered the customer's acceptance of the license terms, even if they didn't read every detail.

• Example 2: Hardware with Embedded Software

  A consumer buys a new smart home security camera. The camera comes in a sealed box. Upon opening the box and setting up the device, the user is prompted to download a companion mobile application. During the app's installation and initial setup process, a screen appears displaying a lengthy "Terms of Service" agreement. The user must click "I Agree" to proceed with connecting and using the camera's smart features.

  This demonstrates the principle of a shrink-wrap license in a modern context. While there isn't a physical software disc, the terms for the embedded software and its companion app are presented *after* the purchase and opening of the physical product. The user's action of proceeding with setup and using the device (or clicking "I Agree") signifies their acceptance of these terms, which were not fully disclosed at the time of purchase.

• Example 3: Bundled Software with a Peripheral

  A graphic designer purchases a new drawing tablet. Inside the tablet's packaging, there's a separate, sealed envelope containing a CD-ROM for specialized design software that works with the tablet. The envelope has a small sticker indicating that opening it constitutes acceptance of the software's license agreement. The designer opens the envelope, installs the software, and uses it to create digital art.

  Here, the software's license terms are hidden within the sealed envelope, which is analogous to the shrink-wrap on a software box. The designer's act of breaking the seal on the envelope and installing the software is deemed as their agreement to the license terms, which they could not fully review before opening the software package.