However a court in China ruled against the claims made by non-fungible tokens (nft) buyer, it was found that these tokens are virtual property protected by law.
A court in the city of Hangzhou, capital of China’s Zhejiang province, ruled in a case involving a contract dispute regarding the sale of an NFT collection, Told Statement published by the court on Tuesday last week.
The court noted that NFT collections possess the “unique properties of networked virtual assets” as well as property rights characteristics such as value, scarcity, controllability, and readability.
According to the court,
“The contract involved in the matter does not violate the laws and regulations of our country, nor does it violate the actual policy and regulatory guidance of our country to prevent economic and financial risks, and should be protected by the law of our country.” should.”
NFTs contain the artistic expression of the creator and have the value of the associated intellectual property rights, it added, while also creating digital assets on the blockchain.
“Therefore, NFTs belong to the category of digital collectible virtual assets. […] Different from tangible or intangible goods in normal sales contracts,” it said. “NFT collectibles, a new type of online virtual asset, should be protected by the laws of our country as an object of transaction between two parties.”
The court also noted, however, that when it comes to the legal properties of NFT collectibles, Chinese law “currently does not clearly stipulate them.”
That said, the transactions in these types of cases are equivalent to selling digital goods online, and as such, they are e-commerce activities – regulated by China’s e-commerce law, the court argued.
company vs wang
The defendant in the case is a Hangzhou-based digital company that operates an e-commerce platform specializing in the sale of digital artwork, the statement said. On the other side of this court battle stood users of the platform, referred to by the pseudonym Wang, as plaintiffs.
What led to the lawsuit is that the platform canceled the purchase of the NFT collection – which Wang claimed was done without his consent.
In February, the company announced that the “NFT Digital Collection Blind Box” would be sold in limited quantities. It also said that a mobile phone number “must correspond to real name authentication” while making purchases while invalid orders without real name authentication, incorrect personal information, etc. will be terminated and purchases refunded.
Wang claimed he bought one such box for ¥999 ($143) after filling in his mobile phone number and personal information, but the company never delivered it, instead refunding Wang after 10 days. Therefore, he asked to fulfill the contract or pay compensation of ¥99,999 ($14,325).
Meanwhile, the company claimed that the mobile phone number and ID number provided by Wang when placing the order were incorrect, so it made a refund. Furthermore, according to the company, the contract was not concluded at that time, and even if it had been, it would have been terminated in accordance with the agreement due to incorrect information provided by the buyer. Lastly, the digital box has already sold out, so it would be impossible to send it to Wang after the trial.
claims rejected
The court noted that the announcement issued by the company, along with all the instructions provided by it, was a formal invitation to interested parties to make an offer. When Wang “successfully submitted” a blind box, it created a binding contract agreement between the two parties.
Although. The announcement made it clear that the platform had the right to terminate any contract in case of misinformation. The court said, based on the details of the order submitted by Wang, “the fourth digit of the mobile phone number and the sixth digit of the ID card filled in by him do not meet the requirements.” This, along with the refund sent to Wang, gave the company the right to terminate the contract.
While Wang requested the fulfillment of the contract, this had no legal basis as there was no longer a contract. Furthermore, since there was no breach of contract, Wang’s alternative claim for compensation of 99,999 yen “had no uniform factual and legal basis,” and was not granted by the court.
So the court rejected Wang’s claim.
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