[comp.misc] Shrink wrap contracts

perkins@bnrmtv.UUCP (Henry Perkins) (07/29/87)

In article <6965@ism780c.UUCP>, mikep@ism780c.UUCP (Michael A. Petonic) says:
> When you go to a store and pick up a copy
> of say Lotus 123, you didn't buy that package but a license to use
> the software that is enclosed.

It's not necessarily that way.  Lotus wants you to think you're
just getting a license, but the courts haven't ruled on the matter.
They HAVE ruled that any such limitations are invalid if they're
not clearly visible (on the outside of the package) at the time of
sale.

There are two unresolved issues here:

  o  Are shrink wrap contracts binding?

For a contract to be binding, two things must happen: both parties
must consent to the contract, and both must receive some value.  A
contract which one party enters into by removing the shrink wrap
from a box does not clearly satisfy the consent requirement.  You
could counter this by writing "By accepting this check you agree to
the sale in full of one copy of Lotus 123" on your check.  If the
retailer takes your check you've got the same type of contract, but
superseding the one under the shrink wrap.

  o  Are they selling goods or services?

It's clear they're selling something: the disks, the printed
matter, and the box are all tangible goods.  What isn't clear is if
the software on the disks can be considered a service or not.  The
"licensers" argue that they provide a service to the users of their
software, and the actual encoding of the bits on the disk is
irrelevant.  The closest analog in a non-software area is those
"choose your own adventure" books, where the story is determined by
the reader's choices.  These books are sold as tangible goods, so
it's reasonable to treat software as goods as well.

However, this theoretical argument may be irrelevant.  Most states
tax sales and not services.  Did you pay sales tax on the full
amount of the purchase?  If so, the state has decided the software
is a good rather than a service, and you own it.  It's not possible
for the full price to be for the tangible goods only (and the
"services" free), because that makes the contract invalid since the
companies received no value for these "services".  The state would
rather side with you than give back all the sales tax revenues from
"sales" of software.

Copyright law prohibits reproduction of information sold on disks
(other than "fair use" such as making backups) anyway, which is the
main point of all those onerous "licensing agreements".

My recommendations:

  o  Treat programs as copyrighted goods, like books.  Obey the
     copyright laws.

  o  Protect yourself.  Pay by check, and write "By accepting this
     check you agree to the sale in full of one copy of XXX" on it.
     If your state taxes sales and not services, buy the program
     in-state; pay the sales tax and keep your receipt.
-- 
{hplabs,amdahl,3comvax}!bnrmtv!perkins        --Henry Perkins

It is better never to have been born.  But who among us has such luck?
One in a million, perhaps.