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Can Avatars Make Contracts?
edadams sends in a story about the legal questions that are starting to crop up over property disputes in virtual worlds. A lawsuit in March 2008 that stopped one Second Life user from selling a virtual product created by another user marked the beginning of a significant amount of casework for several law firms, in large part due to the way Second Life's currency interacts closely with real money. (And yes, apparently the product in that particular case was for cybersex — did you have to ask?) "As transactions grow in volume, it's inevitable that disagreements will crop up. Linden says that although it will enforce its terms of service, including its ban on violating other users' intellectual property, it can't settle most disputes for users." A lawyer for one intellectual property firm handled a case in which the co-ownership of virtual real estate had to be determined, ending with a financial settlement given to two users who helped a virtual land developer run a group of Second Life islands. As virtual worlds get more popular and their business models more directly affect real-life finances, we can expect these legal issues to become more common as well.
The elements of a contract are mutual assent (offer, acceptance and meeting of the minds) consideration and absence of defects (such as lack of capacity or fraud). A signature is only one way of showing acceptance. Actions can also show acceptance. When you press "I accept" or something similar on an econtract, you accepted (though if someone who was not you accepted for you you could use a fraud defense assuming you can prove it was more likely than not someone else acted without your consent).
The medium through which a contract is formed does not matter. EULAS and TOS stand regardless of the electronic format. Having an avatar act as an online electronic agent for your RL self is still binding, assuming you are in control of the avatar. It is unclear what happens if you get hacked. Personally, I disagree with the trend to try to make one liable for all misuses of ones accounts, and i think if the defendant can show fraud and unauthorized use, the contract should not stand.
If avatars work in a virtual economy tied to real money, the contracts formed through avatar interaction are valid, whether you have a paper contract and real signature or not. However, given the logic of protecting yourself from a fraud defense of some sort, I can understand refusing to do business where significant amounts of money are involved unless you get confirmation of the other parties real identity. The contract can only be pure RP if no lindens are exchanged, because lindens are tied to real money. Think about the legal problems of gambling with lindens. It was arguably RP but if people won something that turned into money, various legal issues are triggered.
Not legal advice, just a few definitions and general conversation. IAMYL.