The phrase used to describe a type of purchase or license agreement associated with shipped goods, such as boxed versions of computer software purchased at a store. Shrink-wrap licenses usually means that the “agreement is bound with the product by plastic wrap (shrink wrap)”, and will specify rights of use, fees, warranties and limitations of liability and End User License Agreement (EULA) printed on paper inside the product box or packaging. Consumers make the purchase, remove the shrink wrap and open the product. Shrink wrap agreements usually specify that opening the product constitutes acceptance of the terms and EULA.
See “Is Software Ownership the Same as Licensing?” in Webopedia’s “Did You Know…?” section.