ProCD v. Zeidenberg: Do Doctrine and Function Mix?
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Description
The purpose of this essay is to recount with some particularity the philosophical, economic, and legal issues raised in one of the most important contract cases of the past generation. ProCD v. Zeidenberg explores in a new technological context two critical and recurrent issues of contract law: how the formal rules of offer and acceptance apply to shrinkwrap and clickwrap transactions, and whether an otherwise valid contractual provision is preempted by federal law. The 98 first issue concerns the application of the perennial rules of offer and acceptance to the brave new world of computer software. It conveniently breaks into two parts. The initial inquiry is whether two parties have entered into any agreement at all. Then if it is established that the parties made some agreement, which terms proposed by either side are included or excluded? The particular contracts involved in ProCD were formed between the “seller” of computer software and the ultimate “buyer,” who purchased the software package through a retailer who was conveniently allowed to drop out of the picture. At issue in this case was how the rules of offer and acceptance, as captured in the Uniform Commercial Code, apply to shrinkwrap contracts where the seller seeks to impose restrictions on how particular products may be used. The second question in ProCD arises only if the plaintiff overcomes the initial hurdle and persuades a court that the parties have indeed entered into an agreement that contains the seller’s desired provisions. Phase two asks what types of substantive limitations the vendor may place on its product use that are consistent with public policy. More concretely, does the copyright law of the United States place any federal limits on the use restrictions that the software seller may impose on its buyer with respect to the data that has been transferred (or licensed) to the buyer? The issue is technically described as one of federal preemption: Does the command of a valid federal statute block, expressly or by implication, the use of certain contractual terms otherwise allowable under state law? ProCD raises both issues in vivid fashion because it is twice blessed by two strong opinions that point in opposite directions. Judge Barbara B. Crabb of the Western District of Wisconsin held that Zeidenberg had purchased the software free of ProCD’s effort to restrict his use of the transmitted data. Judge Frank H. Easterbrook, writing for himself and Judges John L. Coffey and Joel M. Flaum, ruled foursquare for the plaintiff on both the contract interpretation and the copyright preemption issues. The two contrasting opinions reflect a profound difference in the role economic analysis plays in influencing the legal analysis. That difference is encapsulated in the distinction between doctrine versus function: Judge Crabb is the faithful doctrinalist and Judge Easterbrook the ardent functionalist.
Source Publication
Contracts Stories
Source Editors/Authors
Douglas G. Baird
Publication Date
2007
Recommended Citation
Epstein, Richard A., "ProCD v. Zeidenberg: Do Doctrine and Function Mix?" (2007). Faculty Chapters. 385.
https://gretchen.law.nyu.edu/fac-chapt/385
