Startup entrepreneurs love “disruption”—a buzzword that has come to mean sweeping out old models of delivery or consumption and replacing them with technological alternatives—but their lawyers often do not. The law can be slow to change, and its application to any new technology is never totally predictable. Just ask Aereo, the company that sought to disrupt television viewing with its miniature antenna technology until the U.S. Supreme Court shut it down last year. But even where the law itself may not “disrupt,” it does tend to adapt. Courts confronting novel issues of law often are inclined to look for analogies, molding older precedent to accommodate new situations.
This process has been particularly clear over the past several years, in the important area of contract formation. Every law student for well over a decade has read Judge Frank H. Easterbrook’s seminal Seventh Circuit opinions Hill v. Gateway 20001 and ProCD v. Zeidenberg.2 These cases addressed issues of contract law that arose as consumers embraced new ways of buying and selling software and computers (and later a host of other goods) in the 1990s. They are often called the “shrinkwrap” cases because they tackle the issue of whether a consumer can be found to have agreed to contract terms after a purchase is made: The new terms are inside the “shrinkwrap” and the consumer accepts them by removing it and using the product. The shrinkwrap cases highlighted new ways of thinking about contractual relationships, emphasizing that they can be more fluid than courts had traditionally found. That flexibility has been crucial to the growth of online commerce and the rise of direct-to-consumer retail.
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