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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.

30 of 134 comments (clear)

  1. Product? I Thought It Was a Service! by eldavojohn · · Score: 5, Funny

    ... (And yes, apparently the product in that particular case was for cybersex -- did you have to ask?) ...

    Wow! They've productized cybersex? I thought it was a service! Is it over-the-counter yet? Does it come in a gel or powder that I apply to my genitals? I have so many questions on how it works. Can I get it delivered to my house discretely? Brilliant move but the physics are still a little confusing to me.

    --
    My work here is dung.
  2. Cue the Second Life expert (but not a lawyer) by Lordfly · · Score: 4, Insightful

    If you signed your name on an actual contract, you're liable for the contract. If, on the other hand, you're an idiot and sign it with your Second Life avatar (or Slashdot ID for that matter), I would imagine the contract is at least called into heavy question.

    I did contract work in SL for 3 years. I always signed my name on real, mailed-over contracts. I had to do work with other contractors, though, who in a fit of privacy histrionics, refused to divulge any part of their private life to these real-world companies they were working for, and thus "signed" a "contract" inside the virtual world.

    Not surprisingly, they either didn't last long doing contract work or got so heavily ostracized for their insanity they never got another call again.

    In short, don't be a moron. Get a real contract, in real paper, and sign it with your real name (and make sure they do too!)

    Anything else is just roleplay.

    --
    hookers and grits.
    1. Re:Cue the Second Life expert (but not a lawyer) by 91degrees · · Score: 3, Interesting

      Ultimately for a contract to be valid, both sides have to agree to it. The signing a piece of paper isn't required. "Paint my house and I'll give you $100" is a contract (assuming it's a genuine offer). The only problem is it's hard to prove that I agreed.

      So, you can agree to a contract via your avatar, but considering the nature of Second Life, there's a decent argument that nobody believed it was a genuine agreement.

      In short, don't be a moron. Get a real contract, in real paper, and sign it with your real name (and make sure they do too!)

      Yes!

    2. Re:Cue the Second Life expert (but not a lawyer) by PPH · · Score: 3, Interesting

      a contract isn't valid, if it is for an illegal activity...you can't uphold a contract for prostitution

      Prostitution isn't illegal everywhere. Just try to renege on your obligation to pay for personal services in Amsterdam and see who the cops throw in jail.

      --
      Have gnu, will travel.
    3. Re:Cue the Second Life expert (but not a lawyer) by Gorm+the+DBA · · Score: 4, Insightful
      Be very careful about that assumption...

      Many (most?) state's laws regarding prostitution require actual physical contact (or the promise of same), so, since a digital being can't perform physical contact, an agreement to "I'll let you enter commands on Second life that will show animations where your avatar appears to be fucking mine and use poseballs to enhance the animation for 30 minutes for 1000 Linden" actually *might be* valid. (assuming all the other requirements for a contract are met)

      Regardless, though...the contract in question here wasn't actually *for* cybersex, it was for the creation and ownership of a digital thing *used in* Cybersex...and that sort of contract would almost certainly be enforceable, assuming all the other requirements were met.

    4. Re:Cue the Second Life expert (but not a lawyer) by Anonymous Coward · · Score: 5, Insightful

      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.

    5. Re:Cue the Second Life expert (but not a lawyer) by Lord+Ender · · Score: 3, Interesting

      "Cybersex" is not prostitution. It's more like writing erotic poetry (sans skill).

      --
      A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
    6. Re:Cue the Second Life expert (but not a lawyer) by Bigjeff5 · · Score: 2, Informative

      Most MMO's involve walking around doing stupid stuff without much real point.

      In WoW and such, it's gaining levels. There's no end game, so there isn't really a "point" to it other than entertainment and distraction.

      In Second Life, there are actually I'd say a lot more ways to entertain yourself, and a "point" that is a lot closer to reality than other MMO's. CAD type folks would enjoy the modeling aspect of it - SL started as just flat land boarderd by water, Avatars, and the basis for an economy, i.e. Lindens which were based on the US dollar. Everything else (outside the tutorial area) was built by SL players.

      This was the basis for litterally, a "second life" with its own economy, only it was primarily design and modeling skills that allowed one to become "rich" in SL. The cool thing was, making millions a year in SL meant making hundreds of thousands a year in the real world. Not a bad gig really. That is until the Second Life Banking Crisis of 2007.

      --
      Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
    7. Re:Cue the Second Life expert (but not a lawyer) by KDR_11k · · Score: 2, Informative

      As it has been stated in an earlier story about luring a cat on the keyboard to press that the cat is considered an object for that purpose and cannot enter contracts. If the cat walked across the keyboard without your ability to interfere you're probably off the hook as long as your actions afterwards don't indicate that you accepted the terms anyway (e.g. for a software EULA that you proceed with the installation and use anyway instead of cancelling the install/uninstalling), if you consciously manipulated the cat into walking across the keyboard in a way that triggers the "I accept" button that's like building a Rube goldberg device to hit the button, in the end you still initiated the click,t he complexity of your input device is irrelevant.

      --
      Justice is the sheep getting arrested while an impartial judge declares the vote void.
    8. Re:Cue the Second Life expert (but not a lawyer) by pyrote · · Score: 2, Interesting

      I'll be honest, I used to help run a virtual Cathouse. The girls involved were VERY talented and took their 'job' very seriously, and we never had an unsatisfied customer. For some of the women, it helped them in Reality get over intimacy issues, or escape some real life hardships, much like some escape into a good book.

      Those days are gone for numerous reasons, but not due to the lack of quality of the hired.

      --
      THE WORLD IS GOING TO END!!!! eventually.
  3. Cyberlaw by Reason58 · · Score: 4, Funny

    Trying to get the long arm of the law around cybersex cases could be a really sticky situation.

    You've got to hand it to them though.

    1. Re:Cyberlaw by ouimetch · · Score: 2, Funny

      What exactly am I sticking to my hands?

    2. Re:Cyberlaw by Lumpy · · Score: 3, Funny

      A legal reacharound?

      Ewwwwwww...

      --
      Do not look at laser with remaining good eye.
  4. is this really all that important? by jollyreaper · · Score: 5, Funny

    I'm not the biggest geek in the world but I consider myself to still be very geeky and I find this to be the most pointless waste of time and effort I've heard about since Twitter. Virtual lawsuits? Only if I can DM the lawyers.

    I don't think us geeks are going to be complaining about the music kids listen to these days or getting off the lawn, we'll just bitch about how the impractical and useless the latest techno-geek fad is. "Twitter? What, blogs with RSS updates aren't good enough for you, son? Back in my day--"

    "Back in your day your CPU only had one core and you liked it, right? Your polygons didn't even have textures, you had to customize your config.sys and autoexec.bat just to play--"

    "Aw, shut up. And get off my lawn."

    --
    Kwisatz Haderach
    Sell the spice to CHOAM
    This Mahdi took Shaddam's Throne
    1. Re:is this really all that important? by nine-times · · Score: 2, Insightful

      As virtual worlds get more popular and their business models more directly affect real-life finances

      I think some people just take it for granted that virtual worlds will become more popular and business will become more and more active in them and even dependent on them. However, I think this remains to be seen.

      Anyone seen real numbers on Second Life recently? I always thought the whole thing was a bit silly and poorly thought-out. I know a couple years ago there was a period of months were lots of people were talking about Second Life and it was even in the news, but I don't hear much about it these days. I almost wouldn't be surprised if this lawsuit was being engineered or at least promoted by Linden Lab to try to build up hype and legitimacy.

      Can an avatar be held to a contract? Ok, whatever. Prosecute the avatar for fraud and throw him in Second Life prison. Yeah, we're pretending that Second Life is interesting or matters.

      Yes, I know people have real money in Second Life. People have real money in online poker, too, but that doesn't make it a valid economy.

  5. Argh . . . I run screaming away! by MarkvW · · Score: 4, Insightful

    IAAL and the last thing--the very last thing--that I want to do in a computer game is form legally binding relationships. Today it's contracts and cybersex. Tomorrow its libel and "You wrongfully damaged the value of my avatar!"

    If I get in a contract dispute in a computer game, I don't want to end up in court--I want a virtual duel with swords or pistols! I want to be able to cheat somebody in a (virtual) contract and laugh at them down the barrel of a plasma blaster when they complain.

    Some MMOGs want to create a game environment that can get people sued in real life--all the while disclaiming ANY liability on their part for the social cost of such wasteful, stupid lawsuits. I'll run, screaming, away from such utter lunacy.

    But, hey, its good business for lawyers . . . what the hell!

    1. Re:Argh . . . I run screaming away! by DaveV1.0 · · Score: 2, Interesting

      So, I take it you play EVE Online.

      --
      There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
    2. Re:Argh . . . I run screaming away! by Anonymous Coward · · Score: 2, Insightful

      SL is not a "game", it is a virtual world. Some see it as a predecessor of a 3D Internet. Instead of websites, people have lands or stores or space where they create and display virtual goods and art. SL virtual objects can link to traditional websites where people can sell real world goods. Also, SL objects can give people information in more interesting ways than 2d websites and allow more engaging interaction and collaborations. Educators use SL (and not just for sex ed) and so do librarians. I won't bore you with the spiel on artist, band promotions and the like, but unless you enter a gaming area or create a game on your land, SL is more like a social and commercial networking site, albeit with dragons and furies.

      Does seeing it as a 3d network with real commercial potential for it's users make this dispute more reasonable? Can you imagine tell Amazon that your econtract with them was part of a "game" because it took place on the computer and there cartoon like graphics and virtual pictures of goods on their website? I would like to see you challenge Amazon to some sort of virtual game duel instead of paying them cash, but somehow I don't think they will accept that.

    3. Re:Argh . . . I run screaming away! by dcollins · · Score: 2, Funny

      IAAL... I want to be able to cheat somebody in a (virtual) contract and laugh at them down the barrel of a plasma blaster when they complain.

      Confirmed: That's definitely a lawyer.

      --
      We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
  6. IAAL but not a SL expert... by Smidge207 · · Score: 5, Informative

    Ultimately for a contract to be valid, both sides have to agree to it.

    Exactly. Plus, the Statute of Frauds requires certain transactions to be documented in a signed "writing." But what is a "writing" under the law? Does this mean hard copy? Will the courts really enforce the Statute of Frauds strictly enough to avoid liability under electronic contracts as the Internet proliferates? Now that handwriting software and peripherals are an alternative to keyboard input, the signature requirement of the Statute of Frauds may no longer be an issue.

    And what about the three-day right of rescission afforded consumers in certain transactions in California? For example, home solicitation contracts may be rescinded within three days of formation of the contract. These agreements are the result of solicitations by vendors at the consumer's home. The consumer must be provided with a hard-copy form that simply requires his or her signature and mailing within the three day period to void the contract. This "change of mind" provision may or may not apply to solicitations on the Internet if received on a PC at home. But perhaps they should. Likewise, seminar sales solicitations also allow a three-day right of rescission under different provisions of the California Civil Code.

    And what about the Mailbox Rule? If contracts are accepted upon dispatch, does the sending of email cut off the right of an offeror to withdraw his or her offer notwithstanding the fact that the emailed acceptance has not yet been received? And what if the offeror sends his or her withdrawal of the offer before the acceptance is emailed, but the withdrawal is not received until after dispatch of the acceptance? Issues such as these must be addressed within the context of a technology that causes email delivery to be unpredictable and delivery records to be easily manipulated. The solution to these issues may be dealt with on a case-by-case basis as the specific fact patterns surface in the courts. However, a more efficient approach would be legislative committee research and formulation of a set of commercial statutes that will accommodate virtual contracts before litigation proliferates. Legislatures need not be visionaries to anticipate and resolve the inadequacy of present-day commercial law. The "Internet Commercial Code" would facilitate the free flow of commerce in the new medium and avoid the unnecessary burden of what is now foreseeable litigation. Indeed, an organization called the National Conference of Commissioners of Uniform State Laws is already working on a revised Uniform Commercial Code that will accommodate the new legal issues created by virtual contracts.

    =Smidge=

    --
    Is it just my observation, or is eldavojohn an idiot?
  7. Avatar Contract by Foofoobar · · Score: 2, Insightful

    This is such a dumb question and here is the scenario: say I play a businesswoman online. Now say my little brother gets ahold of my account while I'm in the bathroom and decides that I'm going to prostitute myself and gets into a binding contract. Did my avatar make the contract or my little brother THROUGH the avatar? When I get back to the keyboard is my avatar to be punished because they were 'possessed' by the spirit of my little brother?

    Impossible to enforce. If there were an in game judicial system, it would be treated as temporary insanity. To which you would also NEED a judicial system for arbitration. This introduces lawyers. And now the game becomes a PVP free for all.

    --
    This is my sig. There are many like it but this one is mine.
  8. IANAL and not a SL person either by Cro+Magnon · · Score: 2, Insightful

    But as I see it, there should be no problem signing contracts as $AVATAR - for strictly SL (or other virtual world) activity. As soon as RL enters the picture (including RL money), I agree, use your real identity.

    --
    Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
  9. Re:Product? I Thought It Was a Service! by ThomConspicuous · · Score: 2, Informative

    "product in that particular case was for cybersex"
    I thought the same thing at first...but the case was in regards to a product used for cybersex.

  10. Re:What? by geminidomino · · Score: 2, Funny

    Pretty soon the English language will consist only of the letters l,o, R, U, s, t, and f.

    -b

    I can solves puzzle?

  11. To quoth the late George Carlin: by mmalove · · Score: 3, Funny

    Selling's legal.
    Fucking's legal.

    Why isn't selling fucking legal?

    Thank you internets, for bringing this time old question back in yet a new way.

    --
    You can get 15 minutes of fame, but you can go down in history for infamy.
  12. I am incredulous by Nerdposeur · · Score: 4, Funny

    I cannot believe that people are interested in playing a GAME where you have to hire land developers and sort out legal contracts. What's next, Virtual Tax Filing and Online Toilet Sanitation?

  13. Re:Product? I Thought It Was a Service! by fishbowl · · Score: 3, Interesting

    >Wow! They've productized cybersex?

    It was a product line with a variety of custom made animations, each of which represents dozens or hundreds of hours of work, and is by all means a tangible medium of expression and as such is subject to copyright law.

    --
    -fb Everything not expressly forbidden is now mandatory.
  14. Re:Product? I Thought It Was a Service! by bob.appleyard · · Score: 2, Funny

    Can I get it delivered to my house discretely?

    What, as in one at a time?

    I'll get my coat...

    --
    How dare you be so modest!! You conceited bastard!!
  15. Second Life by Locke2005 · · Score: 2, Funny

    Second Life, the online environment that asks the age-old question, "Do androids dream of cybersex with electric sheep?"

    --
    I've abandoned my search for truth; now I'm just looking for some useful delusions.
  16. Re:I've said this every time. by tonyreadsnews · · Score: 2, Insightful

    it's a game ... it's barely a game.

    usually I let people continue to misunderstand.
    Second Life, poorly worded product as it is, is more akin to a web hosting service with a built in 3D interface.

    Some people make/play games, some socialize, and some conduct real business (just like they do via webpages, email, skype, webex...).