This article is written by Ekta Aggarwal pursuing B.A.LL.B from KCC Institute of Legal and Higher Education (affiliated from Guru Gobind Singh Indraprastha University, Delhi) during her August,2026 internship at LeDroit India.
Scope of the Article
- Introduction
- E-Contracts
- Click Wrap Agreements
- Browse Wrap Agreements
- Shrink Wrap Agreements
- Difference between Click wrap, Browse wrap & Shrink wrap
- Legal Framework in India
- Critical Analysis
- Conclusion
- References
Keywords
Shrink wrap, Click wrap, Browse wrap, Electronic commerce, Brazilian legislation, International distance contracts
Abstract
The purpose of this article is to provide a legal framework for certain contract practices in electronic commerce, namely “shrink-wrap,” “click-wrap,” and “browse-wrap.” The article deals with definitions and characteristics of these concepts as well as the case law analyzed abroad, especially in Canada and the United States of America.
The study is done using the inductive method, which means that it starts with the analysis of various cases related to the existence, regularity, and enforceability of these commercial practices and ends with a set of recommendations to help providers, customers, lawyers, and judges. The conclusion contains a necessary update of the Brazilian legislation that is expected to be achieved through the introduction of bill no. 3514/2015 ensuring efficient consumer protection in international distance contracts.
- Introduction
The evolution of technology and the changing nature of contract law have caused a paradigm shift in contracts from the use of traditional written contracts to electronic contracts. The application of technology has improved the efficiency and speed of making contracts. The growth of the number of international companies has caused the emergence of new types of contracts such as ShrinkWrap contracts and ClickWrap contracts. ShrinkWrap contracts require customers to accept the terms of agreements just by opening the package and in case of ClickWrap contracts, customers should take other steps other than simply opening a package in order to approve the terms. Nevertheless, these types of contracts pose the problem of fairness and enforcement for the parties.
- E-Contracts
E-contract is a version of agreements which went overseas and came back with the latest gadgets and its enhanced name. E-contracts exist in the modern world and refer to the digital forms of agreements. They are strikingly similar to traditional contracts but exist only in a digital format. The term e-contract refers to the change in the working of people in business; people get rid of intermediaries and make deals directly with customers. Intermediaries now are no longer people who bring together buyers and sellers rather the software which connects consumers with either of the parties involved.
As far as the Agreement formation is concerned, the Indian Laws defined in the Indian Contract Act, 1872, Section 10 read something like this – “All agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and lawful object and are not expressly declared to be void by the Act.” And it is also mentioned in Section 10(A) of the Information Technology Act, 2000, that “If, in the formation of a contract, the communication of proposals, the acceptance of proposals or the revocation of proposals and acceptances, etc. has happened in electronic form or by electronic means, then such contract is enforceable and shall not be deemed to be unenforceable just because electronic means or form was used.” Electronic signature is given the same status as a signature as per the Indian Evidence Act, 1882, and Digital Signature Certificates are generated upon the signing of a document electronically, which is legally valid according to the IT Act, 2000. Contracts in India are governed by the Indian Contract Act, 1872, and the electronic contracts must be legally valid as per the interpretation of law. The features of electronic contracts include;
- Offer
- Acceptance
- Legal consideration
- Legal object
- Competent parties to contract
- Free consent
- Certainty of terms
e-contracts are less costly and cumbersome, thus people prefer them to go through a lengthy process. On the contrary, electronic documents make contracts simpler and make the time taken to execute contracts much shorter than lengthy paper contracts. In fact, e-signatures considerably save both your time and effort. Thus, e-contracts are legally enforceable and valid even if signed and executed digitally. However, this is not the case for click-wrap contracts.
Click wrap, browse wrap and shrink wrap agreements are the type of E-contracts.
- Click Wrap Agreements
Click-wrap agreements are usually present during software installation processes. Also called click-through agreements or click-wrap licenses, click-wrap agreements are take-it-or-leave-it contracts that do not permit negotiation. They are the basis upon which potential consumers choose whether to buy a product. Once a customer has accepted the deal, he does this just by clicking on “I accept” or “I agree”. Otherwise, the customer has to walk away with his rejection. There are different types of click-wrap agreements, for example, type and click when the user has to input “I accept” and click on the submit button to show his approval of the terms of the deal.
A user must do this in order to be able to download or see anything. There is also icon clicking where the user has to click on “OK” or “I agree”. If a user does not want to accept the terms of the contract, he has to click on “Cancel” or close the window. Click-wrap assertions enable online companies to establish contracts with several customers without having to engage with them exclusively. click-wrap also allows companies to save electronic signatures and to add many extras not covered by the existing digital legislation.
- Browse Wrap Agreements
Generally, browse-wrap agreements pertain to the usage of materials that are available on the site or downloading content. The access to the website is permitted only if the individual accepts the terms and conditions as prescribed on the given web page.
Typically, the website will mention that continued visiting of the web site and the downloaded software confirms acceptance of the terms. More often than not, even though the terms are expressed on the site, the existence of browse-wrap terms may not be evident.
- Shrink Wrap Agreements
Shrink wrap agreements are contracts or license agreements or any other contract terms which are enclosed with products. The use of the product is considered as acceptance of the contract by the buyer. The term “Shrink Wrap” refers to the covers of shrink wrap plastic material, which is used for wrapping software boxes as well as the terms and conditions that are contained in the goods being transported.
Software companies heavily depend on the application of “Shrink- wrap” contracts in the mass market distribution of software. “Shrink- wrap” contracts are non-signed license agreements that claim that if the customer opens the Shrink- wrap packaging or any other form of packaging of the product, or use the product, he or she acknowledges the terms of the agreement. In most cases, personal computer manufacturers have opted to distribute copies of software to users instead of selling them for the following main reasons.
First, that is to neutralize the “first sale doctrine” rule that states once the software was sold, the copyright owner has no say over its future, since all rights concerning the copy in question are exhausted. Then there is a need to inform the user about the warranty terms and conditions, if any, provided by the seller with regards to the software, and to eliminate other warranties that may apply under the Uniform Commercial Code. Furthermore, the license agreement introduces other terms and conditions including limitations regarding the use of the software, limitations of liability, governing law, etc.
- Difference between Click wrap, Browse wrap & Shrink wrap
Clickwrap, browsewrap, and shrinkwrap are different methods of setting out the terms and conditions on the internet. With clickwrap, the user has to actively agree to the terms, typically by clicking a button or ticking a box like ‘I agree’, which makes it the most robust kind of user acceptance. In the case of browsewrap, it is assumed that the user agrees to the terms just by using or browsing the website, the terms generally being given via a link, and it is therefore more difficult to establish that the user has actually agreed.
Shrinkwrap involves the terms becoming binding when a customer opens the packaging of a physical product, installs software, or uses the product after having bought it. The main difference therefore lies in the way in which the user agrees to the terms: with clickwrap an explicit click is required, with browsewrap agreement is based on continued use of the website, and with shrinkwrap it is based on opening or using the product.
- Legal Framework in India
- Indian Contract Act, 1872
The Indian Contract Act, which came into force in 1872, is the primary source of contract enforceability in the country. A valid contract must consist of an offer, acceptance, consideration, valid object, and lawful consent of the parties. Shrink Wrap and Click Wrap Agreements: It may be difficult to prove acceptance and consent in the case of Shrink Wrap Agreements, as consumers are often unaware of the deal terms prior to acquiring the product. Click Wrap Agreements, however, generally fulfill the requirement for consent and acceptance as long as the terms are presented clearly and in an accessible manner.
- Information Technology Act, 2000
This Act offers legal acknowledgement to electronic contracts and digital signatures, facilitating the approval of Click Wrap Agreements that are developed over the internet. Consequently, many law firms in Ahmedabad and other cities of India promote the use of digital agreements that suffice according to IT Act statutes.
- Consumer Protection Act, 2019
The guiding philosophy of consumer law in India upholds fair and just practices by businesses vis-a-vis consumers. The validity of Shrink Wrap Agreements with secret, inequitable clauses can be challenged as per the provisions of the Consumer Protection Act. It is the responsibility of businesses to ensure that dealings under their standard-form contracts are fair.
- Critical Analysis
According to the ruling in Long v. Provide Commerce, Inc., the Browse Wrap agreement will be enforceable only if the consumer has been made aware of and understands all of its provisions. The ruling confirms that such agreements will only be enforceable if a reasonable person would have been aware of the terms of the agreement, which will depend on the arrangement and design of the links.
In a different scenario involving Nguyen v. Barnes and Noble Inc., the court determined that the contract could be enforced due to the presence of proximity and conspicuousness of the link. However, in the case of Re Zappos.com Inc., the court found that the contracts could not be enforced since the typeface, color and design of the contracts’ links were identical to other links appearing in other contracts. Thus, customers could not distinguish between them.
Click wrap contracts and shrink wrap contracts are known to be unilateral and considered as fixed contracts. The key difference in terms of acceptance lies between click wrap contracts and browse wrap because while click wrap requires action from the user to accept their terms, browse wrap only assumes acceptance from the user while browsing the website. Different forms of contracts such as click wrap and browse wrap are typically used online by websites that want to force their consumers to agree to their terms and conditions differently from one another.
Click wrap would require users to signify acceptance while browse wrap does not require anything on the part of the consumers. The three types of contracts where an online site can achieve a lawful agreement with consumers include browse wrap, click wrap and shrink wrap. Browser wrap is the most basic form of agreement since it was used for simple and effective transactions online while shrink wrap is used primarily in the software industry.
The issue of click wrap agreements involves two main components which include an agreement and a legal notice outlining every condition that is applicable. Moreover, these agreements also require active acceptance which is usually done via a pop up with buttons like ‘I accept’ and check buttons. The existence of such an agreement on any application or website means that if the user wants to progress further, it is mandatory to give express permission and acceptance. The client also has an option to reject the terms and conditions by clicking on the button called ‘Cancel’.
- Conclusion
As we know, the Indian Contract Act, 1872 regulates the contracts while the e-contracts are regulated under the Information Technology Act, 2000. Section 4 of the Act states that If any law requires that information or any other matter to be in writing or in typed or printed form, then despite anything in the law, this condition will be deemed to be fulfilled if such information is –
(a) provided or made available in an electronic form; and
(b) accessible to the user for future reference.
This establishes the fact that the electronic records are recognized legally under the IT Act 2000. The older Indian Contract Act is supplemented by the accepted online transaction as the recognized form of contract in this regard.
