Introduction

The meaning of license is a right granted which gives one permission to do Something which he could not legally do absent such permission, in brief a license is a restricted transfer of use of a property right under limited conditions and for specific term. The right of the licensor is not transferred to the licensee. The licensee has only the right to use something according to the permission that the licensor grants. However, a license should not be confused with a license agreement. A license is an acquired right whereas the purpose of the license agreement is to establish the rights of the parties, their responsibilities and liabilities in relation to the subject matter of the license as between each other and, in some instances, as between themselves and a third-party. Software License agreement by which the Software Developer e.g. developer of a software product (like Microsoft) will give license to the user of such software. By the license the developer retains ownership over the software and gives some limited and specified rights to the user and prescribes restrictions on use of such software. The software license is generally given in the form of End User License Agreement popularly known as EULA In the early days software development focused on the creation of customized software for mainframe computers and other computers. Contracts for this type of custom software were very less and involved two distinct parties whose lawyers could discuss all the terms of such agreement between them. This model changed when personal computers and their accompanying software became mass-market items and available off the shelf. In such market the number of users increases by big numbers. The software programmer and the user could not come face to face for the license to negotiate terms and condition, thus the terms of such licenses had to be standardized and concise. The software license agreement needed to be presented to the customer in a fashion that would allow for mass distribution of software yet would draw the customer's attention to the conditions under which the publisher offered to allow use of the software. The standardization also arose because of the provisions of the Copyright Act and other Acts in USA.

Some features of EULA .

-It grants normally a nonexclusive and nontransferable personal license to the user by the software owner to use the software subject to the agreement. -It is not a sale of Software. The licensee does not get rights as that of the purchaser of goods. -It prohibits user to do certain things for example reverse engineering, decompiling, making additional copies, renting and leasing etc. -The software owner disclaims certain warranties. -If the terms of the EULA are not acceptable to the consumer then the software product can be returned to the vendor and license fees will be refunded to the buyer in case of off the self-product. -In case of online media the license terms should be disclosed in advance of a buyer's purchase of the product or service. In such case of online EULA, the consumer if not accepting the terms will not be required to make any payment.

SHRINKWRAP EULA The word shrink-wrap refers to the clear plastic wrapping that seals the software box and through which buyers can read the license agreement Shrink wrap contracts are license agreements or other terms and conditions of a contractual nature which can only be read and accepted by the consumer after opening the product. The term describes the shrink-wrap plastic wrapping used to coat software boxes, though these contracts are not limited to the software industry. Web-wrap, clickwrap and browse-wrap are related terms which refer to license agreements in software which is downloaded or used over the internet.

The legal status of shrink wrap contracts in the US is somewhat unclear. One line of cases follows ProCD v. Zeidenberg which held such contracts enforceable and the other follows Klocek v. Gateway, Inc. which found the contracts at hand unenforceable but did not comment on shrink wrap contracts as a whole. These decisions are split on the question of consent with the former holding that only objective manifestation of consent is required while the latter require at least the possibility of subjective consent. In particular, the Netscape contract was rejected because it lacked an express indication of consent (no "I agree" button) and because the contract was not presented directly to the user (users were required to click on a link to access the terms). However, the court in this case did make it clear that "Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility." The most commonly used EULA is of the "shrink-wrap" or "break the seal" variety types. EULA in this form is printed: On product packaging, A diskette or CD-ROM container (such as an envelope or a plastic case), A card inside the package, A page of the user manual. The user is asked to "accept" the terms of the agreement by performing a certain action designated on the package or in the EULA, such as Tearing open the plastic wrapper covering the box, Breaking the seal on the diskette container Installing or using the software. The user can refuse to accept and enter into the agreement by returning the software product for a complete refund.

CLICKWRAP EULA A click wrap agreement (also known as a "click through" agreement or click wrap license) is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet as part of the installation process of many software packages or in other circumstances where agreement is sought using electronic media. The name "click wrap" came from the use of "shrink wrap contracts" commonly used in boxed software purchases, which "contain a notice that by tearing open the shrink-wrap, the user assents to the software terms enclosed within". Click-wrap is the electronic equivalent of the shrink-wrap method which allows users to read the terms of the agreement before accepting them. The click-wrap method was presented to the court in ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) where Zeidenberg purchased a CD-ROM created by ProCD which contained a compilation of a telephone directory database. Upon purchase of this CD-ROM Zeidenberg installed the software onto his computer then created a website which offered to visitors the information contained on the CD-ROM at a price less than what ProCD charged for the software. Prior to his purchase of the software Zeidenberg may not have been aware of any prohibited use or dissemination of the product without consent by ProCD. However upon preparing to install the software onto his computer the software license appeared on his computer screen and would not allow him to continue with the installation without indicating acceptance by clicking his assent in a dialog box. The court held that Zeidenberg did accept the offer and the terms contained within the license by clicking through the dialog box. Zeidenberg had the opportunity to read the terms of the license prior to clicking the acceptance box. The court further stated that Zeidenberg could have rejected the terms of the contract and returned the software.

The content and form of click wrap agreements vary widely most of the agreements require the end-user to manifest his or her assent by clicking an "ok" or "agree" button on a dialog box or pop-up window. A user indicates rejection by clicking cancel or closing the window. Upon rejection the user can no longer use or purchase the product or service such take-it-or-leave-it contract was described as a contract of adhesion, which is a contract that lacks bargaining power, forcing one party to be favored over the other. The terms of service or license do not always appear on the same webpage or window, but are always accessible before acceptance such as through a hyperlink embedded in the product's webpage or a pop-up screen prior to installation. In order to be deemed to have accepted the terms of service the purchaser must be put on notice that certain terms of service may apply. If the terms of service are not visible or accessible then the courts have found the notice requirement to be lacking and as such the purchaser may not be bound to the terms of the agreement. An earlier case, Specht v. Netscape Communications Corp., 150 F.Supp.2d 585 gave perhaps the clearest definition of a click wrap license. A click-wrap license presents the user with a message on his or her computer screen, requiring that the user manifest his or her assent to the terms of the license agreement by clicking on an icon. The product cannot be obtained or used unless and until the icon is clicked for example when a user attempts to obtain Netscape's Communicator or Navigator a web page appears containing the full text of the Communicator / Navigator license agreement plainly visible on the screen is the query-do you accept all the terms of the preceding license agreement? If so click on the Yes button if you select No setup will close below this text are three button or icons-one labeled "Back" and used to return to an earlier step of the download preparation; one labeled "No" which if clicked terminates the download and one labeled "Yes" which if clicked allows the download to proceed. Unless the user clicks "Yes" indicating his or her assent to the license agreement the user cannot obtain the software.

Presenting EULA via the computer screen is especially important now that more software is being distributed electronically through Internet and other media. For this form of distribution, the EULA often appears on the user's screen before the software is downloaded to the user. If the user assents to the on-screen EULA (usually by typing "yes" or "I accept" clicking on an icon with similar words or simply pressing the "Enter" key) the user may install the software. In the absence of fraud the failure to read the terms of the click wrap agreement does not negate the enforceability of that agreement.

Advantages of click-wrap over shrink-wrap

The main advantage of click-wrap contracts over shrink-wrap contracts to me seems to be the fact that with click-wrap contracts youre given a clear opportunity to read through the terms and conditions of the contract before you agree to them. With shrink-wrap contracts the fundamental problem is that the consumer doesnt get to know the key terms of the contract until they open the box, by which point it is often too late to get the money back for the software product. Click-wrap contracts are more enforceable than shrink-wrap contracts thus offering the software company more peace of mind. Shrink-wrap contracts have questionable enforceability. Although it is true to say that shrink-wrap contracts are gaining wide acceptance, this lack of full legal acceptance is seen as a worrying fact for software companies that want to precisely control the terms and conditions for use, limitation of liabilities and warranties and warranty disclaimers of software for their protection. Click-wrap contracts on the other hand have gained almost universal acceptance as law binding contracts. The reason behind this is that with click-wrap contracts you cannot proceed unless you click the I agree or I accept button, if you dont acknowledge your agreement to the terms and conditions set in front of you by pressing one of these buttons then you cannot proceed to use the downloaded software, downloaded music,

cant do or use any other of the things you might expect to be protected by a click-wrap contract. If on the other hand you do agree with the terms and conditions and click on the appropriate button, the law will say that you had time to read the contract, the chance to reject the contract but you clearly have agreed to it and so are legally bound by the same.

Are Shrinkwrap and Clickwrap Agreements Enforceable?

It is now fairly well established that shrink-wrap and click wrap agreements are legally binding and enforceable. The early decisions in this area resolved most of the basic concerns about mass-market licenses in favor of enforceability. For example, provided that the user knows that the transaction is subject to additional terms and has a right to return the software and receive a refund in the event that those terms prove unacceptable, courts have ruled against users who argued that the terms of shrink-wrap or click wrap agreements should not be enforced because the users had not read them or because there was no opportunity to read all the terms before payment. The enforceability of contracts in the United States is governed primarily by state law, and it is probably too soon to say that the enforceability of shrink-wrap and click wrap agreements has been definitively established throughout the United States. Nevertheless, there is a growing consensus that the procedures for shrink-wrap and click wrap agreements outlined above generally yield enforceable agreements. It looks very much as if shrink-wrap and click wrap agreements are here to stay.

Limitation
There are instances in which certain shrink wrap and click wrap agreements have not been enforced. The courts will not enforce shrink wrap or click wrap agreements in situations where the vendor's procedure for contract formation is flawed and as a result the terms of the license never become part of the agreement between the vendor and the user.

The Approaches of the Law to Shrinkwrap and Clickwrap License Agreements

The existing laws that is coherent to software transactions such as Copyright, Trade secret and Patent laws have failed to provide sufficient protection of proprietary interest in software. Software Developers consequently rely on the use of contracts in the form of license agreements as a means to protect software from unauthorized use and copying. In the United States, the Uniform Commercial Code (UCC) plays a pivotal role for the commercial transactions. However, in the aspect of shrink-wrap and click wrap license agreements, there is no specific law to apply. Therefore a relevant law at this time is only Article 2 of UCC governing the sales of goods transactions. However some legal scholars disagree that Article 2 sales doctrine of the UCC should be applied to software licensing agreements because it is fundamentally inconsistent with the commercial reality of such transactions. The vast majority of courts at the earliest time treated software as goods within the scope of Article 2.

Conclusion
By granting a license to the purchaser to use the software rather than selling the program outright the Software Developer is able to retain and have control over his product. Such controls include retaining the title of software, limitation of customers use, prohibition of reverse engineering, warranty disclaimers, elimination of battle of form dispute, limitation on the liability and the choice of governing law/ forum. Most of shrink-wrap and click wrap license agreements are non-exclusive licenses which mean the licensor reserves the right to license the same software to other licenses. Exclusive licenses are uncommon because they prevent the re-licensing the software and receiving additional license fees Neither shrink-wrap nor click-wrap contracts are fully ideal for either the consumer or for businesses wishing to sell software or other intangible products online. Of the two however click-wrap is the superior, this is due mainly to the fairness it offers consumers in the ability to view the terms first and also because of the level of enforcement click-

wrap contracts have achieved in the courts, albeit US based. We can conclude that they are adhesion contracts which do not really accomplish the concept of mutual assents and bargains as provided in the contract theory. Actually they are take it or leave it agreements in which the user is not made aware of the terms until late in the transaction which is different from traditional written contract