Not if you contracted in Second Life you don't.
Or do you...?
In addition to knowing next to nothing about property law I also know nothing about the law of contract. So here goes - contracts in virtual worlds…
In many legal systems for there to be a commercial contract a number of conditions need to be met. One of these conditions is that there must be a ‘consideration’.
That is if one is receiving a good or service then you are need to give something of value in return for there to be a binding commercial contract. The value can be nominal famously as low as the value of a peppercorn, but it must be value.
Common practice in virtual worlds and in particular Second Life is the payment for services using the in-world currency. In the case of Second Life the currency is Linden Dollars (L$), these are defined in the terms of service thus:
“1.4 Second Life "currency" is a limited license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab.
You acknowledge that the Service presently includes a component of in-world fictional currency ("Currency" or "Linden Dollars" or "L$"), which constitutes a limited license right to use a feature of our product when, as, and if allowed by Linden Lab. Linden Lab may charge fees for the right to use Linden Dollars, or may distribute Linden Dollars without charge, in its sole discretion. Regardless of terminology used, Linden Dollars represent a limited license right governed solely under the terms of this Agreement, and are not redeemable for any sum of money or monetary value from Linden Lab at any time. You agree that Linden Lab has the absolute right to manage, regulate, control, modify and/or eliminate such Currency as it sees fit in its sole discretion, in any general or specific case, and that Linden Lab will have no liability to you based on its exercise of such right.”
Source: http://secondlife.com/corporate/tos.php (retrieved on 17 Sept 2009)
Of course the ToS does not say L$ cannot be redeemed for value, it says they cannot be redeemed from Linden. So Linden are not standing in the way of two parties making an agreement using L$.
But hold on. If the parties succeed in making a contract and the consideration is L$ then the L$ must have value. What’s more the value cannot be something that has meaning only to the parties, it must be value that is widely recognized, if not any two parties can just make up value between themselves.
Also, like in cases that have popped up, we can look at what Linden say about Second Life, this link says it all really: http://secondlife.com/whatis/?lang=en-US#Make_Money.
What this suggest to me is that there are two possible states:
- L$ have no value – thus no commercial contract is ever formed in Second Life where the consideration is L$. That is no one ever buys anything in Second Life, no agreement based on these terms is binding on any party.
- L$ do have value (outside that defined by just the two parties) – as such Linden surely must at the very least have a duty of care to maintain the currency as an instrument of value. There must be a public interest here. Actually I’d suggest that by definition of consideration a public interest is entailed.
If so, where does this duty end? Quite apart from general considerations of unconscionability, how can Clauses in the ToS that use the phrase “reason or no reason” cannot stand as this situation must imply that Linden must have reasonable reason to act in many cases. What about if SL shuts down – do contracts then hold as the consideration has zero value (I assume that it’s fine for there to be value ‘at the time’ but I don’t know).
Go on legal types giza contract law 101 what I have I missed here?
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