Brief Fact Summary. ProCD, Inc. (Plaintiff) sued Zeidenberg (Defendant) for violation of a shrink-wrapped license included inside its CD-ROM database.
Synopsis of Rule of Law. Shrink-wrap licenses are enforceable unless their terms are objectionable on grounds that apply to contracts in general.
Contracts, by contrast, generally affect only their parties; strangers may do as they please, so contracts do not create exclusive rights.View Full Point of Law
Issue. Are shrink-wrap licenses enforceable unless their terms are objectionable on grounds that apply to contracts in general?
Held. (Easterbrook, J.)Â Yes.Â Shrink-wrap licenses are enforceable unless their terms are objectionable on grounds that apply to contracts in general.Â The district court concluded that neither the UCC, nor Wisconsin’s version of the UCC, authorized the payment of money before the disclosure of the terms of a contract took place.Â UCC section 2-204 states that â€œa contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.â€Â The vendor invites acceptance of the offer by conduct and may restrict the manner in which acceptance may be made.Â In this case, ProCD (Plaintiff) proposed a contract that the buyer would accept by using the software after reading the license.Â Defendant accepted.Â Section 2-606 also supports this conclusion.Â A buyer accepts goods if he fails to make an effective rejection after an opportunity to inspect.Â Defendant accepted the goods, had an opportunity inspect and did not reject them.Â Reversed and remanded.
Discussion. Discussion:Â The courts have varied in their decisions regarding shrink-wrapped licenses with the enforceability of such license being upheld in more recent cases.