What is a shrink-wrap agreement?

A shrink-wrap agreement refers to a type of contract that is typically included with a product's packaging, particularly software. It is an agreement where the terms and conditions are found inside the box or on the packaging itself, and the user agrees to the terms simply by opening the package and using the product. This form of agreement is understood to be accepted when the user breaks the seal on the packaging, with the premise that by using the product, they consent to the associated terms laid out in the documentation.

This type of agreement often governs the usage rights of software, detailing limitations, rights, and responsibilities of the user. Because it is a common practice in consumer goods and software distribution, understanding shrink-wrap agreements is important from a legal perspective, particularly with regard to enforceability and consumer rights.

The other answers do not capture the essence of a shrink-wrap agreement. A written contract held by shareholders refers to corporate governance documents, an online agreement accepted through clicks pertains to click-wrap agreements which require explicit acceptance online, and a verbal agreement about product usage lacks the formal nature and documentation characteristic of shrink-wrap agreements.