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  • 7.1 Contracting Techniques
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As in any business, agreements in software product business can be drafted individually for each particular case or by using standard policy conditions drafted by one of the contracting parties. If the license agreement is drafted separately on the basis of contract negotiations, general contractual principles must be observed. As a rule, the same principles must naturally be observed also with relation to SPC agreements. However, given technological development the practice of using SPCs in the software product business has given rise to certain peculiar characteristics which, in places, extend beyond general contractual principles. In the software products business, typical SPC techniques include "shrink-wrap", "click-wrap", "bronze wrap" and GPL licenses. [1]



Shrink-wrap is the oldest SPC agreement technique in the software business. The name Shrink-wrap comes from the industrial manufacturing process, in which transparent cellophane is wound tight around a product package. The buyer/licensee can read the license conditions through the transparent film. According to the conditions, opening the package is interpreted as acceptance of the license agreement.

Shrink-wrap conditions may be available on a separate sheet inside the software product's package or in the user manual. The thing all shrink-wrap agreement techniques have in common is that opening the software package, installing the software or the first use of the software creates a contractual commitment. The only way to reject the agreement is to return the software to the seller before opening the package or using the software.  The seller will then refund the software's price to the buyer.


Photo: Laurent Fintoni


The Click-wrap agreement technique (or "click-through") is based on the shrink-wrap  technique. According to the license conditions, contractual commitment is created at the first use of the software when the buyer/licensee accepts the terms by pressing a button on the screen. The buyer/licensee has the opportunity to read the license terms and conditions on the computer screen before pressing the button. According to the license agreement terms and conditions, contractual commitment is created even if the buyer/licensee does not read them. Rejecting the license is done by pressing the "reject" button or by not pressing anything. In that case the program will not run or install. Click-wrap terms and conditions used on internet pages are often called web-wrap.

With Click-wrap agreements the licensee always has the opportunity to read the terms and conditions before accepting the agreement and to find out his rights and obligations as a party to the agreement. Therefore, as a rule,click-wrap agreements can be considered as binding to the contracting parties.

The agreement may be void only if it contains conditions that from the weaker party's point of view are unusual or strict or if it contains particularly ambiguous conditions. Such conditions may be ignored or interpreted to the detriment of the party who drafted them.


Screen-shot of Spotify



The bronze-wrap agreement technique is based on the click-wrap technique but the method of accepting the terms and conditions has been taken even further. With the bronze-wrap technique, contractual commitment is created without anyone having to press a button. Instead, the licensee is given the opportunity to read the license agreement terms and conditions which are made available, e.g., at the bottom of an internet page. On sites that are in English, they are often accessible via a "terms and conditions" hyperlink.

In light of the general contractual principles, the validity of bronze-wrap agreements appears questionable. It is questionable whether the terms and conditions have come to the other party's knowledge and whether he or she has really had the opportunity to read them. However, there is no Finnish case-law regarding the question whether such terms and conditions are binding, and foreign case-law is not consistent on the issue. Whether such agreements are binding is determined on a case-to-case basis.

Notes and References

[1] Välimäki (2009): Oikeudet tietokoneohjelmistoihin, Talentum, Helsinki.