Contract Law: Case Study Analysis of a Microsoft Clickwrap Contract

This case study delves into a Microsoft clickwrap contract, examining its parties, terms, and enforceability. It analyzes the contract's language, determining whether it's plain English or legalese, and identifies an ambiguous clause related to warranty. The study interprets this clause using classic rules of interpretation, including the literal, golden, and mischief rules, referencing the Interpretation Act RSC 1985. The analysis considers relevant case law, such as L’Estrange v Graucob, ProCD, Inc. v. Zeidenberg, and Steven J. Caspi, et al. v. The Microsoft Network, L.L.C., et al., to support its conclusions about the validity and potential challenges of clickwrap agreements.

Running head: CONTRACT LAW
CONTRACT LAW
Name of the Student:
Name of the University:
Author Note:

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1.
The click wrap contract refers to an electronic agreement in which the terms present in
the contract in the same page as the ‘I agree’ button. The consumers who are eager to bind
themselves by those terms are required to read all those and when they agree to the same they
can click the said button. This type of agreement can be enforced as any other contract.
The click wrap contract that we found is attached below:
“Why is Microsoft doing this?
Office 2007, like most Microsoft products, has a support lifecycle during which we provide
new features, bug fixes, security fixes, and so on. This lifecycle typically lasts for 10 years
from the date of the product’s initial release.
What are my options?
Although you'll still be able to use Office 2007, we recommend upgrading to a newer
version of Office so you can stay up to date with all the latest features, patches, and security
updates.
”
2.
The parties to such contract are the Microsoft Company and the end user who is entering
into contract with the former by clicking the green button. It can be supported by the
following clauses from the contract “Manufacturer is Microsoft Corporation, One
Microsoft Way, Redmond, WA 98052-6399.” Here manufacturer denotes on party. “The

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Software is made available for download solely for use by end users according to the
License Agreement.” hence the other party is the end users.
3.
In the case of L’Estrange v Graucob, it was held by the court that when no vitiating factor
like misrepresentation or fraud is present, then a signature made by a party will bind it to the
terms or conditions contained in the contract agreement to which he has signed. In Canada, click
wrap contracts are enforceable unless there is lack of notice of the contractual terms or
conditions. In case of the click wrap contract, the user is required to express his consent to the
contractual terms by clicking the required button. In case the terms are not accessible or seen
then the court will assume that the other party or the user is not notified by such terms and
conditions and hence, the user here is not bound by those terms or conditions and the contract
cannot be enforced then. In the case of ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, it was held that
the user here knowingly accepted the offer as well as the terms present in the license by clicking
on the dialogue box present on the screen. The user here had the opportunity to go through the
terms and understand them prior to clicking the acceptance box and hence he is bound by the
contract.
In Steven J. Caspi, et al. v. The Microsoft Network, L.L.C., et al., 323 N.J. Super. 118
(1999), the Appellate Court confirmed that the decision of the Superior Court that the plaintiff
entered into the contract by clicking the required acceptance button and thus the contract entered
by the user was enforceable like any other contract. The courts usually consider the click wrap
contracts to be valid and enforceable as here there is no question of ambiguity as the users are
given time and opportunity to go through the contract and then only they can agree to it.

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However in case the contract is breached by the company or the product is not according to the
terms of the contract or there is any conflict between the company and contractual terms, then
the contractual terms will be referred and suits can be instituted against the company.
In this regard, the clause that can be referred here is as follows:
“In the event of a conflict between this Microsoft privacy statement and the terms of
any agreement(s) between a customer and Microsoft for Enterprise and Developer
Products, the terms of those agreement(s) will control.
You can also learn more about our Enterprise and Developer Products’ features and
settings, including choices that impact your privacy or your end users’ privacy, in
product documentation.”
4.
The contract referred here is written in plain language and not in legal language or
legalese (Kimble 2016). The reason behind this is the contract can be understood easily and
without any complex legal terms. In case the legal terms are present, the common lay man will
have no idea of it and they will be unable to interpret it (Čėsnienė 2015). Since Microsoft aims to
people at large, thus it prefers to use plain English as it can be understood by the majority of the
people. If legalese is being used, it can be only read and understood by the lawyers or the people
having knowledge in legal language and common people cannot use their products or services.
The following clause can be referred to discuss this issue.
“No Unlawful or Prohibited Use
As a condition of your use of the Services, you will not use the Services for any purpose that
is unlawful or prohibited by these terms, conditions, and notices. You may not use the
Services in any manner that could damage, disable, overburden, or impair any Microsoft
server, or the network(s) connected to any Microsoft server, or interfere with any other
party's use and enjoyment of any Services. You may not attempt to gain unauthorized
access to any Services, other accounts, computer systems or networks connected to any

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Microsoft server or to any of the Services, through hacking, password mining or any other
means. You may not obtain or attempt to obtain any materials or information through any
means not intentionally made available through the Services.”
Here the language is so simple that can be understood by any layman. If it had been
written in legalese, then language would not be so simple.
5.
“THE SOFTWARE IS WARRANTED, IF AT ALL, ONLY ACCORDING TO THE TERMS OF
THE LICENSE AGREEMENT.
The above statement is found to be ambiguous as it can be interpreted in more than
one way. Here the clause can be expressed that warranty is not absolute but limited due
to the presence of the words “if at all”. However, again it denotes that the said software
is warranted only according to the terms present in the agreement of license. However,
extent of the warranty is not mentioned. Hence the wordings are not clear and not
unambiguous.
6.
Interpretation of legal principles can be done in the light of classic rules of interpretation.
As per Salmond, interpretation refers to the method by which the courts try to ascertain the
meaning of the terms or wordings present in a contract (Sarda 2016). In this regard, three main
rules are present which are the literal rule, golden rule and the mischief rule (Flores 2018).
Textual and plain meaning is considered in the literal rule. In the golden rule, the whole context
is analyzed whereas in the mischief rule, the gap is attempted to be breached (Flores 2018). In
this regard, the provisions enumerated in the Interpretation Act, RSC 1985 can be referred too.
The statement mentioned in the above answer is found to be ambiguous and is required to be
interpreted. Here if the literal rule of interpretation is applied, then the clause can be expressed
that warranty is not absolute but limited due to the presence of the words “if at all”. However, if
the golden rule is applied, then it denotes that the said software is warranted only according to

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the terms present in the agreement of license. Again if the mischief rule is then the mischief
present in the clause can be referred. The mischief is the extent of the warranty is not mentioned.

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References:
Bray, S.L., 2019. The Mischief Rule. Notre Dame Legal Studies Paper, (19912).
Čėsnienė, Ž., 2015. Lexical Units Impeding the Perception of Legalese in the Context of Plain
Language Principles. Res Humanitariae, 16(1), pp.37-53.
Flores, D., 2018. The Not So Golden Rule. Philosophy Now, 125, pp.32-34.
Interpretation Act, RSC 1985
Kimble, J., 2016. A curious criticism of plain language. Legal Comm. & Rhetoric: JAWLD, 13,
p.181.
McInnes, M., Kerr, Ian R., and VanDuzer, J. Anthony, (2018). Managing the Law: The Legal
Aspects of Doing Business (5th ed.). Toronto: Pearson.
Sarda, M., 2016. Important General Rules of Interpretation: A Study. Available at SSRN
2758062.