## Facts

- Wachter Management Co., a construction management company, negotiated with Dexter & Chaney, Inc. (DCI), a construction software vendor, regarding purchase of accounting and project management software.
- On October 15, 2003, DCI delivered a written proposal covering software purchase and related services; it contained no integration clause and did not indicate that additional terms would later apply.
- On October 17, 2003, Wachter signed the proposal at its Kansas office, which the court treated as acceptance forming a contract.
- DCI shipped the software and included a shrinkwrap license stating that using or installing the software constituted assent.
- The shrinkwrap license included a Washington-exclusive choice-of-venue clause.
- After software problems arose, Wachter sued DCI in Kansas for breach of contract, breach of warranty, and fraudulent inducement.
- DCI moved to dismiss for improper venue based on the shrinkwrap venue clause; the district court denied the motion, and DCI pursued an interlocutory appeal.

## Issues

1. Whether a shrinkwrap license enclosed with shipped software, delivered after execution of a negotiated written proposal, became part of the parties’ contract, including its Washington venue clause.
2. Whether, under UCC modification rules, a buyer’s installation/use of software constitutes “express assent” to a material modification proposed in a shrinkwrap license.

## Decision

- The Kansas Supreme Court affirmed the denial of DCI’s motion to dismiss for improper venue.
- The court held the parties’ contract was formed when Wachter accepted DCI’s written proposal.
- The shrinkwrap license was not part of the original bargain and operated only as a proposed amendment.
- The Washington venue clause materially altered the parties’ agreement and was unenforceable absent Wachter’s express assent.
- Continued performance (installing/using the software) did not establish express consent to the new venue term; the case could proceed in Kansas.

## Legal Principles

- Computer software is treated as “goods” governed by UCC Article 2 even when incidental services accompany the sale.
- A sales contract may be formed in any manner sufficient to show agreement, including offer and acceptance evidenced by signed writings and performance.
- A shrinkwrap license provided after a contract is formed is treated as a request to modify the existing agreement, not as an original term of acceptance.
- Material alterations proposed after contract formation are not incorporated unless both parties agree to them.
- Under K.S.A. 84-2-209, contract modifications require express assent; mere continuation of performance after receiving additional terms is insufficient.
- The offeror controls the terms of the offer and bears the risk of failing to include desired terms (such as venue) in the negotiated written agreement.

## Conclusion

The court held that a negotiated written agreement to purchase software formed the contract, and a later-delivered shrinkwrap license—especially a forum/venue term—was only a proposed, material modification requiring express assent; because no express assent occurred, the Washington venue clause could not defeat Kansas venue.


Wachter Mgmt. Co. v. Dexter & Chaney, Inc., 282 Kan. 365, 144 P.3d 747 (Kan. 2006)