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United States Court of Appeals for the Seventh Circuit - Shrink wrap/click wrap licenses are enforceable as contracts., 86 F.3d 1447
Tags: Contracts, Property, Shrink wrap licenses, Licenses
tl;dr:
A license that is included on the shrink wrap on the outside packaging of an item, or that the buyer must click through in order to use the product, is enforceable as a contract.Video Summary
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The court ruled that shrinkwrap licenses are enforceable contracts unless their terms are objectionable, and the district court erred by stating otherwise. ProCD created a computer database using information not eligible for copyright protection and implemented a contract-based approach to control price discrimination. ProCD sued Zeidenberg for reselling the database without adhering to the license terms. The court ruled that a purchaser cannot be bound by terms that were secret at the time of purchase, even if subsequent licenses are identical to the first. The court treated the licenses as ordinary contracts governed by the common law of contracts and the Uniform Commercial Code. The court suggested that notice on the outside, terms on the inside, and a right to return the software for a refund if the terms are unacceptable may be a valuable means of doing business for both buyers and sellers.
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