Shrink-Wrap Agreements

7 July 2016

Introduction Shrink-wrap agreements are very common in today’s commerce. Shrink-wrap agreements are agreements whose terms are expressed inside a box in which the goods are packaged. Usually, the agreements have the Terms and Conditions in which the party is informed that they agree to the terms by keeping whatever is in the box. It is the buyer’s responsibility to read the Terms and Conditions before using the product.

In most Terms and Conditions, there will be an arbitration clause in which, if agreed upon, if there is a dispute that arises both parties have to go to arbitration to settle the dispute. Most courts enforce arbitration clauses especially in cases where there is a martime transaction or where a contract involves a transaction crossing state lines.

Shrink-Wrap Agreements Essay Example

To enforce an arbitration agreement, they must be written and in plain language and there must be a knowing and voluntary waiver of the right to sue in court. One important consideration is whether the parties form their contract before or after the seller communicates the terms of the shrink-wrap agreement to the buyer. If the buyer learns of the agreement after entering into the contract, the courts will say those terms were proposals for additional terms and were not part of the contract unless the buyer expressly agreed to them.

In the scenario used Mary DeFontes buys a computer and software from Dell and is charged. In this amount is a tax included which is then paid to Rhode Island. DeFontes then sues Dell claiming that Dell is overcharging by collecting a tax on service contracts and transportation costs. Dell then counters that DeFontes agreed to an arbitration clause that in the Terms and Conditions because she did not return the merchandise within 30 days. This time limit is not in the Terms and Conditions. DeFontes is bound to the agreement as long as she opened the box and used the merchandise. The courts should grant Dell their request as long as DeFontes agreed to the Terms and Conditions by her conduct or other means. DeFontes should succeed in her suing whether it be in arbitration or courts.

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