On MMOs, EULAs, Other Legal Shenanigans

Garthilk writes "In an interesting Q&A over at Okratas.com, they pose some questions for MMO-related lawyer Don Shelkey. Don is a lawyer with Buchanan Ingersoll PC, one of the largest 110 law firms in the nation, who represent many videogame developers on legal matters. Don explains what exactly Technology Transactions are, how EULAs protect the developers, virtual property law and a little about his work with Sigil Games regarding Vanguard: Saga of Heroes." Shelkey, himself a rabid online gamer, argues of MMOs: "EULAs [End User License Agreements attached when you buy a game] are enforceable contracts and there is nothing to indicate that a clause prohibiting the sale of online goods wouldn't be enforced. So, courts should enforce the EULA in the company's favor based on a breach of contract if the company were to proceed to trial on the matter."

Comments

minors?

[Anonymous Coward]

First, how is it a contract if I didn't sign it? This sounds a lot like a Contract of Adhesion.

Also, I'm a minor, how can I legally "sign" a contract? I'm guessing plenty of kids play games. Hell, you could even get your 4 year old daughter to click through the EULA for you.

This is basically the "same old" stuff. There are laws protecting the consumer from signing away their rights.

Re:minors?

[cpt kangarooski]

First, how is it a contract if I didn't sign it?

Because signatures are not required to have contracts. This should come as no surprise; people make enforcible verbal contracts routinely.

This is probably an adhesive contract, but those are generally perfectly valid.

Also, I'm a minor, how can I legally "sign" a contract?

By agreeing to it. Minors DO have the power to form contracts. The special treatment for minors is NOT that they aren't allowed to contract (for they are) but that minors can, if they choose, escape enforcement of contracts against them for anything other than necessities. This means that a minor can contract to, say, buy a car, and then can sue to ensure that the car is delivered to him, but cannot be sued to force him to pay for it. OTOH if it were a contract for food, he could be sued, since that's a necessity, and we want people to be willing to sell necessities to minors.

However, minors that avoid contracts they've made are generally under an equitable obligation to return goods, or value, to the other party so that they are not unjustly enriched by their special status. Also contracts you make as a minor but don't avoid by the age of majority are basically ratified and become completely binding.

People who say minors can't contract (in the US at least) simply don't know what the hell they're talking about.

Hell, you could even get your 4 year old daughter to click through the EULA for you.

Why? When you tell someone else to agree for you, it's still ultimately you that agreed.

Here is a good rule of thumb for legal situations: Do not be clever. Do not do clever things. Do not try to get away with stuff by adhering to the letter of the law in a patently transparent way. This is because no one is really as stupid as you must think they are if you think that will work, and it will in fact NEVER work.

As has been said, "the law is not an ass," and it will not only STILL get you when you're being clever, you will have only pissed it off and made things worse for yourself.

Re:minors?

[Eccles]

Because signatures are not required to have contracts.

Poorly phrased, but true. However, contracts are required to have several things, including a meeting of the minds and an exchange of value. EULAs do not give, they simply take, so the latter is not present. If there is no meeting of the minds, I should be able to continue as I would have otherwise. However, refusing to accept an EULA agreement generally prohibits me from using software I've already purchased, and which a vendor may not agree to let me return once opened. Even if the vendor will take it back, I may have shipping or transportation costs which they will not refund.

No, EULAs are corporations trying to pervert the laws to their own ends, breaking principles of law that have lasted hundreds of years in the process.

Note that if software companies want to add EULA restrictions, they have a perfectly reasonable way to so: sell their software over the web. As long as the EULA provisions are presented prior to purchase, all the general principles of contract are there, and purchasing shows consent. But this lazy BS that they should be able to pervert contract principles in a commercial sale through a third party should die a painful death.

IANAL, but if one could still read for the bar, I might try.

Online property laws

[Doctor Cat]

You know, 50 or 100 years from now, there'll be legal precedents, court rulings, and/or laws establishing what does or doesn't happen in the courts when someone steals your castle or your magic sword, who pays real world taxes on what, etc. For better or for worse. But somehow, I like the era where mostly the courts and the legislators and the police haven't even noticed the idea of "virtual property law" yet. When you might just say "Well, how do I want my game to work" and try and get away with it. It leaves us developers a little more elbow room to try and do that "innovation" thing. Hopefully, in the long run, we'll end up with laws that do more good than harm. But I like the whole "settling the wild cyberspace frontier" feel in the current marketplace.

Re:Online property laws

[DavidTC]

And you get arrested for fraud when you hack a saved game file to get 999999 gold?

Note...

[Sheetrock]

Don is a lawyer with Buchanan Ingersoll PC, one of the largest 110 law firms in the nation, who represent many videogame developers on legal matters.

Which should tell you all you need to know about why this guy strongly believes in the power of EULAs: he's paid to.

Whether or not they are technically enforceable is mostly irrelevant, because when a company brings out the lawyers most people choose to cave in rather than deal with the 5+ digit lawsuit costs and associated headaches. So maybe they can be considered enforceable by the fact few can put up a defense (enforceability by fiat?)

(I am not a lawyer; this is not intended as advice in any way, shape, or form)

Re:Note...

[geminidomino]

However, just because he says they are perfectly valid does not mean in any way that they are

Also keep in mind that just because he says they are does not mean in any way that they aren't. Until the EULAs get tested in court by a judge who will determine validity rather than "settled" on, the lawyers on both sides can flap their gums all they want; it's all bullshit.

Why turn your back on a revenue stream?

[Andy_R]

Why don't the game companies simply join in selling items? It's not as if duplicate items would cost them anyhing to produce.

Re:Why turn your back on a revenue stream?

[zarthrag]

This goes completely against games with "virtual" economies. Players with deep pockets will tend to own more property, have better items, and eventually social stature. Why duplicate real life by unbalancing your game with such a destructive force. Not all game companies are in it for the money.

Re:Why turn your back on a revenue stream?

[Ronny Cook]

If the items sold are regarded as assets, the company has an obligation to maintain the value of those assets. Otherwise it can get sued.

For example, I sell you a virtual sword for $1. I've made $1 for that, but if I then shut down the game where the virtual sword exists, you no longer have access to that $1 "asset" and you can sue me for (effectively) stealing it from you.

One possible way around this is to code depreciation into the game engine - assets depreciate by 50% per annum and lose all value after 5 years. Until the 5 year mark the company will buy your virtual sword for its full depreciated value. If the depreciation is described up-front, before the purchase, there's no contractual basis to sue; the company has used assets in "maintaining" the virtual object and the depreciation simply reflects that. Such virtual property will have to appear on the company balance sheet as a liability until fully depreciated.

There are other reasons for these restrictions - once an item becomes your property rather than theirs, they can't freely change the object (whether it be the graphic model, or some other characteristics for balance purposes), restricting how the company can adjust the game they've written. The quality of the game may suffer as a result - if a munchkin item is released it can't be rendered harmless, and those who possess such items become disproportionately powerful. "Stealing" within the game starts to matter more, and the company may be forced to take on some law enforcement functions that they could really live without.

However, I suspect the main reason is just so the MMOG companies retain their freedom to pull the plug when they want to do so.

Re:Except that....

[jewf1sh]

Actually, an EULA is an agreement, not just a license (End User License Agreement). Simply put, it is the agreement by the user to adhere to the license. When the user agrees to adhere to the license, it becomes a contract between the parties because the agreement was accepted by both. Therefore, he is correct in stating that it is a binding contract.

There is no property

[EvilIdler]

When playing an MMORPG, you're renting an account on someone's
server. I don't see how you can *own* anything in virtual space
then. If the server closes down, everything's gone. The company
running the servers don't owe you anything for 'lost property'.
You were using other people's resources to maintain that virtual
castle.

I think MMOs should have ways to trade property in-game, though.
Passing along a deed, DAoC-styles, works nicely for medieval games,
and some sort of vendor would work for a more modern world. But
when people start trading in-game housing for real-world money, it's
up to the server maintainers how they want to treat it. No real-world
laws should be necessary for virtual property. Or perhaps MMOs
should allow a 'lawyer' profession, in addition to the usual warrior/
rogue/mage/priest choices :)

Re:People are missing one important fact here...

[vadim_t]

But see, there's a problem here. That it's a game doesn't it stop from being something you bought. If you go to Disneyland, and they fail to deliver the entertainment you bought from them, by say, having all attractions broken, or suddenly closing 5 minutes after you paid for the ticket, I'd consider it perfectly reasonable to ask your money back.

The same way, if Everkill consist in killing things to get magical items, and you lose that to a crash, you could quite successfully argue that you didn't get what you paid for. While a server crash that causes you to lose your +10 Sword of Banishment, which took you a month to get probably won't be compensated with $1000, you probably could reasonably argue that a crash that erased a month of progress in the game should entitle you to get a month of payment back.