Due to confusions and discrepancies in the pre-existing licenses types, e-merchants started to switch to Click wrap agreements as they’re more definite and creates a compulsion for the customer under which unless the customer accepts the terms and conditions and marks the same by his affirmative action of clicking on the acceptance button, he cannot proceed any further in relation to which his express consent is required to form a valid e-contract.
Caspi vs. Microsoft Corporation1 was a case in which the Hon’ble court imposed a provision in Microsoft Network software which was that of a ‘choice of law’ as per which the installation of any of its software could proceed further only if the consumer clicked the button saying “I Agree” otherwise not. The courts in most of the cases have accepted this kind of agreement as more efficient and easily implementable measure to make sure that the consumers consent was given expressly. The same was upheld by the Courts in various cases such as Real Networks, Inc. Privacy Litigation2, Hotmail Corp. v. Van Money Pie Inc.3 the validity of click wrap agreement was challenged in these cases but court upheld it each time. Its applicability was made enforceable under English and Scottish laws by the Scottish decision of Beta Computers vs. Adobe4
Shrink Wrap Agreements
Shrink wrap works on a basic principle of “Pay now, terms later”. In this kind of an agreement, in the initial stage the consumer pays for the good and the merchant delivers the goods which is enclosed inside a box or a wrap and when the consumer receives that product and opens it, the terms and conditions of the product is kept inside the box which is provided to the consumer and the consumer has a choice or rather a right to accept the terms and conditions as laid down by the merchant or else reject them by returning the product to the merchant and the merchant is then bound by the agreement to return the full amount paid by the consumer.
One of the classic cases of Shrink Wrap is ProCD, Inc. v. Zeidenberg5, the defendant in this case had bought software, the terms and conditions of its license were kept inside its box and also encoded on the CD, easily accessible. The Hon’ble Court held that terms and conditions of the license which is contained inside the box of the product bought is binding on the customer, if they use it after having the opportunity of reading it and having an option of returning the same in case he does not agree to the terms enclosed.
This proposition of the court was expanded in the case of Hill v. Gateway 2000, Inc.6 in which the customer ordered a computer over the phone and the manufacturer put the terms and conditions of the license inside the box of the computer which, as per its provisions would be the governing terms unless the consumer rejects the same by returning the computer within 30 days of purchase. The Hon’ble Court in this case held that the manufacturer has a right to demand an express action which implied the acceptance of the customer and in case the customer fails to abide by the same, the general presumption in such cases is that the consumer has accepted and agreed to the terms and conditions enclosed by the manufacturer.
Browse Wrap Agreements
These types of agreements do not hold much value in the court as an express assent of the consumer isn’t required when the terms and conditions are presented to him in the form of Browse wrap agreements. Browse wrap agreements are similar to a portal which when clicked by the consumer takes him to a different web page and the terms and conditions governing the contract are written there which the consumer may or may not read as when he clicks on the link, he can proceed further and his consent is presumed to be present as he opened it. Such kind of a contract can be very regressive as the consumer may or may not read it and there is no express action required by him to affirm that he has actually read the conditions and that he is accepting them nonetheless.
There was a lot of litigation seen in the court as just because the terms and conditions are accessible to the consumer doesn’t mean that consumer will constructively read and give his assent to the same as was held in the case of Microstar vs. Formgen7. Sometimes the merchants include onerous terms and it’s their duty to attract the consumer’s attention towards it and they try to evade it by placing hyperlinks of the terms and conditions as was done in the case of Interfoto Picture Library Ltd. v. Stiletto Visual Programmed Ltd.8 where the Court said that the merchant must boldface type or add a separate note to draw the attention of the consumer towards any surprising or onerous terms that he might have included in the terms and conditions.