What does the term "shrink wrap license" refer to in software licensing?

The term "shrink wrap license" refers to a license that is activated upon removing the plastic wrapping of a software package. This type of license is typically included with packaged software and becomes effective when the consumer physically opens the package. The idea behind shrink wrap licensing is that by opening the product, the user agrees to the terms and conditions outlined in the license agreement, which is often found inside the packaging or displayed during installation.

This approach allows software companies to distribute their products widely while establishing legal terms for usage without requiring a signed contract or direct interaction with the customer. It is a form of acceptance that assumes the user consents to the terms by engaging with the product. This method has been upheld in many legal cases, thereby solidifying its validity in software licensing law.

Other options describe different types of license agreements that do not relate to the traditional concept of shrink wrap licensing. A type of agreement that is only valid when signed in person implies a different legal framework, while an online agreement requiring email confirmation pertains to digital agreements rather than physical products. Similarly, a license applicable solely to digital downloads does not encompass the broader use of physical software applications that are packaged and shrink-wrapped.