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Hello Miners and other interested Parties:)

So I spent about 30 hours here and on some legal forums trying to understand what the actual rights of miners who pre-order hardware.

I was very frustrated trying to get to the bottom of what really is and is not a right of person purchasing through pre-orders.  I really believe it's important to know your rights and assess your risks properly.  So I decided to share this for others to learn and discuss.  I am not a lawyer and this should not be construed to be legal advice.  The purpose of this thread is to spawn discussion and to educate consumers so they may properly deal with vendors and understand liabilities when doing so. This is not meant express a complete tome of information or replace the need for counsel (In fact I highly suggest if you are in a legal situation you immediate retain counsel).

This thread is NOT here to demean, defame, or otherwise discuss specific people or entities.

Please help me to develop and correct any information is here.  I enjoy the interaction and education :)

So let's jump in here:

Your ready to spend a few thousand (or tens of thousands) dollars on some mining hardware? You really need to make sure you understand your risks before risking hard earned BTC.

What covers the consumer when doing online pre-orders?

There are the terms and conditions of the sale and then there is implied warranty.
Terms and Conditions are extremely important to understand when spending large amount of money.  They can dictate a lot of rights in the absence of a formal contract.  Please read them.
Implied warranty covers a basic set of assurances regarding commercial and private trade.  It is perhaps one of the most important laws you need to wrap your head around.  Wikipedia covers it nicely.

http://en.wikipedia.org/wiki/Implied_warranty

This point forward will cover what I've learned about the United States laws covering Implied Warranty.  These conditions are unified in a federal code referred to as UCC(Uniform Commercial Code):

http://en.wikipedia.org/wiki/Uniform_Commercial_Code

This provides a framework that is implemented in each state's localized law:

http://www.law.cornell.edu/uniform/ucc.html

Generally speaking, my current understanding is that, when pursuing consumer protections claims, it's filed in the state of the business itself. (can anybody confirm?)  It's important to read and understand the protections of your own state and the state of entity you are doing business with.  Things get even more difficult when doing international trade.  Anybody that can offer insight on this would be awesome.  I imagine there would be very little cost effective means to enforce any agreement.

There are some terms I ran across that might not be fully understood by the layperson when understanding your rights.  For this part I will pick on Missouri law (only because It's what I was researching while learning).  


Some definitions of importance (huge credit for user drlukacs for being so kind as to walk me through most of this):

Where does "pre-order" qualify to be covered by UCC?

And just as an aside I'll get to in a few, the word "repudiate" as it's used legally for contracts:



Ok here are the key points and code of law bits I understand to be relevant:



Obviously concerns us with pre-order, so if you don't have a definitive date you are relying on what's considered by a court to be reasonable as the dates are changed (think about what technology has exhibit in the past. . . Duke Nukem' forever anybody).



If they don't deliver or express an intent not to deliver, you can not only get your money back, but ask for the difference of funds it would take to purchase a "substitution" product and "any incidental or consequential damage".  Though, another aside I will get to in a bit, this does NOT necessarily oblige them to do business with you.  (My understanding is they can refund you and not do business with you for any reason not classified as a protected class . . sex, age, race, etc.)


This is my least favorite legal ease to parse.  It combines math and legal terminology, I'd rather get punched in the face, but I will do my best.  My horrible explanation (please somebody help me elaborate this) is going to be. . . Taking in to consideration the costs imposed on and market value of the product in addition to damages incurred by the wronged party the guilty will pay for what they caused the other party's loss to be. . . ish . . .hahhaa ok, somebody seriously help me here.


So anyhoo (*quickly runs away from that last paragraph*), due to recent explosions in the community, at this point, I was lead to ask the question "Can a vendor cancel your order because they get tired of the business relationship?".  I couldn't find anything in UCC that explicitly dealt with issue or denied a business the right to chose not to do business with a person. (aside from previously discussed protected classes). It appeared to me that they could do it, but I'm no great legal mind, so I sought verification from a forum that specializes in consumer law.  Off to the webs!!!!


Here's what I got back after explaining the scenario:


Woot that made me feel super smart /s . . .but I had to ask it to verify my understanding


Ok that's helpful :) finally a good question :) feeling much better now


Wow now we're getting to the heart of it :) ( found this surprisingly close to home as I just told the customer was expressing frustration in the community forums)


Well that was short and concise.

Other comments of interest




So where does that leave us?

Well, imo, atleast in Missouri you can expect delivery and if delivery doesn't occur in a "reasonable" amount of time or is repudiate (basically they say, look I'm not going to deliver this) then you can "cover" your costs and damages plus get a substitute product without spending extra money.  This doesn't obligate a company to do business with you, so if you piss off your vendor, they can (and have) cancel your order.  Nothing I've seen outside of an explicit contract or SLA forces any U.S. business to do business with a person they don't want too, even if payment was already sent.  So guys, until you decide you can't handle the risk and cancel your order, be respectful to your vendors.  Other than that please let me know what you think and feel free to let me know where I might have "jumped the rails" a bit


Edit Section
Another bit of code we are beginning to explore and I'm hoping to get verification of relevance:


If you would like to jump to the beginning of that discussion https://bitcointalk.org/index.php?topic=217036.msg2286577#msg2286577


Another interesting bit of code:


If you would like to jump to the beginning of that discussion https://bitcointalk.org/index.php?topic=217036.msg2288560#msg2288560


Additional article on Buyer and Seller Obligations to consider:  http://legal-dictionary.thefreedictionary.com/Seller's+Obligations


I will do my best to keep this updated.

Thank you for the well researched post! These are becoming a rare thing on these forums.

I would like to add that the damages incurred can be very difficult to prove when a firm delivery date isn't specified. So unless the buyer actually purchased another product to cover lack of delivery I don't see how someone would be able to prove damage. It's also my understanding that this purchase would have to be effectively mandated by lack of delivery rather than a choice made by the buyer. The example would be a contract to purchase flour (the buyer runs a bakery) and when the seller doesn't deliver the baker would have to get expedited delivery of flour from another source.

There is one point I wanted to correct:


A vendor can refuse to sell you additional items, beyond what you have already paid for.

But the vendor cannot lawfully cancel your order.

Cancelling your order is a form of repudiation of the contract (i.e., expressing clear intent to not perform the contract). Giving you a full refund does not alter that.

I respectfully disagree. A 5 Gh/s miner has a calculable number of BTC that it can generate per month, and since BTC has a value (can be sold at an exchange), there is a clear monetary loss, and so one can prove consequential damages rather easily.

The standard restitution for breach of forward contract is paying the market price for the contract, or providing comparable goods.

To parse the section that explains the damages for the breach of contract:

(a) the measure of damages
How much is owed.

in the case of wrongful failure to deliver by the seller or rightful rejection or justifiable revocation of acceptance by the buyer
If the seller does not produce the goods, or the buyer rejects the goods as delivered (defective, wrong goods, etc)

is the difference between the market price at the time for tender under the contract and the contract price
What the goods are worth now minus what the goods were worth when purchased. In this case 'tender' means delivery. The delivery was roughly $5K cash. The buyer is making a "rightful rejection" of that delivery.

together with any incidental or consequential damages under Section 2-715, but less expenses saved in consequence of the seller's breach; and

This refers to the following section of the UCC:


BFL can proactively decide not to do business with Xian. However, after having done business with him and entering a contract with him, the time for their right to refuse has come and gone.

Thank you for explaining the law in simple terms.

Endlessa posted the questions here:

http://www.expertlaw.com/forums/showthread.php?t=159009&p=713115

Feel free to review the case they posted and see if they actually did a good job of posing all the questions (with relevant material) attached.

The results sound fairly biased but who knows.

The act of purchase was glossed over. He also did not mention that the market value of the goods had risen in the intervening time, nor did he mention that full price was paid for goods that did not yet exist. It was not an order, or reservation, or deposit. It was a full purchase.

Tempting to add that tidbit to the thread over there and see if that changes things.

P.S. I noted the "Monica", but this is the internet and unfortunately the rules of TOGTFO apply.  ::)

It got so far only a single response.

You are quite right that the act of payment/purchase is omitted, and furthermore, that the "expert" seems to have overlooked the applicable provisions of UCC.

I am impressed with your close analysis of the UCC!  Unfortunately, you took a couple wrong turns. As a threshold matter, the UCC is not a federal code.  It is a uniform set of laws enacted to a greater or lesser extent in many states.  Also, it may not even be relevant here.  I'm happy to help guide you through from the beginning if you're truly interested in getting the correct answer.

Let's begin like this:

Ignore the UCC for the moment.  Cut and paste the text of the specific terms of the contract you entered into with BFL.  When you purchased your hardware, did you ever click "I agree to terms and conditions" or something of the like?  If so, that's your starting point.  The express written agreement of the parties overrides the UCC in almost all instances, so let's start there.

Second: Having read the conversation in your link, it seems the complaint with BFL is that it unilaterally cancelled your order. If that is the case, then you are trying to answer the question "was BFL's cancellation of your order a breach of the contract, and if it was, what is the measure of damages."  This will be very important going forward.

Looking forward to seeing your response!

I was never claiming that UCC is a federal code. Rather, for the sake of the discussion, we were looking at Missouri's UCC, because that is where the member who has a complaint lives, and that was the agreed place of delivery for the goods. This was the original thread:

https://bitcointalk.org/index.php?topic=207331.900

If you would like to check the (very brief :) ) terms and conditions of BFL, I suggest that you visit their site (https://products.butterflylabs.com/) and have a look at the information displayed before one places an order.

Thinking about suing?

Thinking about hurting Sonny Vleisides at BFL?

Think again!

http://www.martindale.com/Gregory-W-Vleisides/1035415-lawyer.htm

This is where the issue becomes, there is no written contract, it's implied, retail sale of goods implication. So in this instance it would be up to the court to make the aggrieved party whole. How would they do that? By ordering the refund of the purchase price. This has been done so what other remedy is available?

Nobody was talking about hurting anyone. That would be illegal.

Suing, though, is a different matter. It is great that Sonny and/or BFL may already have retained counsel (as it appears). Perhaps some of this discussion should be sent to them.

I suggest that you review our past discussion on Missouri UCC. There are number of other heading of damages that can be sought in the case of breach of contract: "cover" costs, consequential damages, incidental damages, etc.

I'd encourage any amount of discussion or contribution that is intended to be productive.  I didn't directly link, because I was worried they might get jumped with a 100 btc users and their forum doesn't general deal with that many people descending on them at once :) I was probably being overly cautious and respectful.

As always :) ty for helping me along understanding this.  This is the most confusing part for me.  Some of the things I read make a distinction between "repudiation" and a desire to terminate a relations.  I really want to clarify this.  It would be great for consumers, if this is the case, and this is the most important definition in this document.  I will start searching for precedence in the courts to show guidance on this.   I so far haven't really seen anything.  I have seen mention of cases where a person orders, pays, and then gets their order canceled and refunded.  I haven't seen anywhere that draws a line between refusing to do deliver and the termination due to a desire to end a business relationship (where not bound by explicit contract or SLA).  I really think, only citation from a similar case in the courts would definitively resolve this.  As always, I'm willing to say I may be completely wrong (probably am lol :) ).  I'm just not sure that say "I no longer find our business relationship worth continuing" fully equates to saying "I am not going to deliver a product".  Hypothetical discussion won't really resolve this, so I'll take this issue to be homework and will try to search for a related case that will show court opinion on the matter.  Anybody who knows of a case, it would be a great help to link it :) Great discussion guys :) this is awesome fun

I am trying my best to keep this independent of a direct discussion of BFL itself.  I really just want the community to consider legal rights independent of the emotion of a specific case, but as a tool for risk management.  I'm a firm believer that an educated customer is an asset and an uneducated customer is a liability.  Additionally, to be clear, this did not happen to me.  I currently have no complaint against BFL.  We have already have at least 1 thread talking about the specifics of that instance.

That being said, you are dead on that UCC on a federal level is merely a legal framework that was an attempt to unify/structure state regulation (my understanding is prior to this trade regulations were all over the board) and is preceded by state implementation.  The federal expression only seems to have effect if it's not defined on a state level (anybody confirm or deny this?).   In the specific instance your talking about, I do not believe (haven't been able to find) where there are any overriding "terms and conditions" aside from no-refunds and a "currently scheduled" date which were on the page at the time of ordering.  Though, I'd really like discuss this on a more abstract level for general consumer awareness sake :).

Great input :) lets keep this rolling

Edit: in this case when talking about the specifics I'm referring to Missouri's implementation, not the Federal framework :)

Respectfully, please stay on topic, there is another thread to behave this way on. 

You are quite right on that.  I don't really consider him and an "expert", just somebody that spends their days and nights thinking about it.  Much like most of us in the bitcoin community spend are time reading and learning about bitcoin.  I thought of it more as a litmus test as they are much more exposed to a broader range of information in their forums than we are here.  Sorry if I didn't make that clear :)

Thanks everybody for all the responses.  I'm off to some "home work" and see if I can't find some court rulings to take a look at so can explore their relation and impact :) Ty for the inputs and focusing me on what I need to verify and elaborate on.  Time to find some more facts.  I'll post back here in a bit :)

That's where I have the biggest problem... WHAT CONTRACT? there is no written contract agreed to by both sides. It's an implied contract at best and even then doubtful. It's a retail sale. And if it was a contract then the contractual terms would spell out consequences of the parties doing <x>.

You are basing this on Missouri's UCC, however, to me it's not clear if BFL is in Missouri or Kansas... Looking into the privacy policy the address in there says Kansas. So which side of the river are they on?

Ok I found something in the code I think is relevant (drlukacs I don't think I got lost in the lease section this time  hehe I found this in definitions. . .please let me know if I did it again). I will add this to the first post under an Edit section.



I was looking for this part before, and ended up quoting the wrong section (in the other thread).  Let me know if I found the right one this time :)

So what I'm thinking were talking here is the difference between Cancellation and Termination.  In the absence of clause explicitly disallowing it (like an SLA or formal delivery contract), don't both parties retain the right to both Termination and Cancellation?  In the case of a vendor cancelling an order for a reason other than breach (aka they don't want to do business with you), wouldn't that more qualify as a "Termination" than a "Cancellation" and release them from their obligations?  If the consumer is not the cancelling party for reasons of breach, it doesn't appear they can later claim breach. ("same as that of "termination" except that the cancelling party also retains any remedy for breach").  I would read this to be in place as a measure to prevent the exact scenario that a vendor terminates the business relationship for non-breach reasons and angry customer then wants to sue.  

Edit: clarification (added a prepositional phrase) :)

Hi centove, it's referred to as an "implied warranty" and  UCC is designed to provide basic assurance to both buyer and seller in non-formal trade (no explicit contract) of movable goods.  Unless you enter into an agreement that overrides this, it is governing code of law.  Does that help?


Edit: It's often referred to as "Consumer Protection" but a lot of states also have additional laws in effect.  We are additionally trying not to discuss BFL directly, as there are several threads doing so, but more so the hypothetical discussion of consumer rights as they relate to pre-orders and consumer education.  Lets try to keep this academic and objective. :) We have plenty of emotion on other threads.  The only reason it's focused on Missouri  (as stated previously) is because I was learning while trying to understand the reality of that specific situation.  I want to share what I learned and get further interaction on a more academic level. :)  

Okay, I can buy that, "implied warranty" != "written contract" that's all I was getting at. In any situation such as this, if It got to court that would be the first thing the judge would want to see is the contract. No contract? Then it becomes a different ball game.

Correct, it then becomes a game played in the realm of UCC. ..and any additional state laws (not being covered here because the vary even more widely).

Here are the terms you agree to when buying product on the BFL website:

Products are shipped according to placement in the order queue, and delivery may take 2 months or more after order. All sales are final.

Ty for the info :) though this thread is more focused on the law than a specific company :)  It is important for all buyers and sellers to be aware of these type of clauses

It is a good example of what to look for when ordering from a company in the US

here's another interesting  section that may (contradiction is invited) address preorder.

I read this as, barring some huge unfair burden ("its operation would be unconscionable") or it occurring on some some agreed upon event (delivery of product, in the case of pre-order).  With some kind of "resonable notification" (email or snail mail or forum post), unless other wise specified (SLA or delivery contract or Term/conditions) a seller could terminate the contract.  One of the only ways, I think, that this could be argued against would be if the business unilaterally terminated all contracts of sale in an effort to utilize this as a "loop hole".

1) substitution of "a reasonable time" for lack of a specific delivery time
2) the contract does not provide for successive deliveries (like a subscription) so this does not apply, but it mainly says that a subscription contract can be canceled if it doesn't specify how many items or for how long the subscription is for.
3) just says you are in violation of the UCC if you decide to unilaterally terminate a contract and do not notify the other party. It does not absolve you of any responsibilities in the contract just because you notified the other party.

According to the UCC: failure to deliver means the seller must make restitution for the value of the contract, for the value of comparable goods, or arrange for comparable goods to be delivered if it chooses not to deliver the original goods in the sale contract.

BFL made the sale, the buyer paid in full, BFL did not deliver, the value of the goods rose, BFL chose not to honor the contract, BFL then resold the goods in question at a higher price (via more pre-orders). Pretty cut and dry. BFL's choices are to: arrange for the purchased amount of GH/s to appear in Xian's mailbox, re-instate his order, or pay the going market price for an early BFL order at the time of the cancellation.

I'd argue that the value of the goods has not risen. The goods ordered didn't and don't exist. The expectation would be that they would be developed. The specification have been drastically altered. BFL offered to switch existing orders over to what was actually produced. Even with higher production costs they've been giving full credit to existing orders in exchange for them accepting the power hungry tech. This is still has no bearing on the issue being discussed.

Which is "what type of contract" is the sale and "how can damages be defined"

This +10. .. million. .. without prior protest there is very little to stand on outside of I am angry.. .which might be a valid personal belief, but not a legal one. . . imo. . .feel free to continue a debate within the restraints of this thread

It seems that you are reading (3) without reading (2) -- the two are interrelated, though:


So, the seller can terminate a contract that involves successive performance  for an indefinite period (for example, a delivery of a newspaper to your doorstep every day).

This is entirely different than the delivery of a single (or a few goods) once.

I agree. I would add that BFL will likely be on the hook for consequential damages too (e.g., the buyer's loss of revenue as a result of the non-delivery).

is it possible BFL would have delivered if the customer had represented a valuable relationship?  I don't see where BFL wouldn't have delivered, even though the date was different than the initial and reasonable questionable initial hope.  He was literally within a few days (based on order date) of delivery and still chose to present arguable debate. . . . .right or wrong it's reasonably questionable and if he had issue it should have been represented as formal complaint instead of conjecture.. ..

none of that is satisfied by action of either parties account. ...

damn it.. .lets get back to education. ..arguing that highly emotional example doesn't help the community as a whole and was promised to be moderated.

Many times there are successive deliveries in pre-orders. .. 1 order or several orders changes the rights of a seller or buyer?  "Absence of Specific Time Provisions" seems to be strongly worded as a heading and I could grant argument of (2) but I still  believe (3) to be applicable . . . .I don't see mutual exclusivity here

Once the contract was concluded (i.e., offer to purchase was accepted), and payment was made, the only reason that a seller can cancel the order is if the buyer explicitly asks for it, and the seller agrees to it. (I note that similarly, the buyer cannot ask for a refund, unless the seller fails to deliver.)

If you read (2), it refers not simply to successive deliveries, but an indefinite contract (i.e., subscription): "If the contract provides for successive performances but is indefinite in duration"

This is clearly not the case that we are discussing here.

The BFL contract completes when the $5,000 worth of mining equipment has been delivered. There is no follow-on delivery of another $5,000 of mining equipment.

An example of something like this would be a maintenance contract where you buy a package of consumables, inspections and labor for the life of the equipment. It would be bizarre if I signed a contract to maintain my printer/copier that had no termination date and I couldn't cancel it.

Another example is a newspaper subscription.

especially given 400.2-106 consistent theme of mutual rights to termination.  it seems the code is expressing the right of termination to be available barring prior agreement/explicit definition.  I'm hard pressed to agree that it is a reasonable assumption that monetary pursuit would be fruitful in the eyes of the court.  If it is, yay consumer! but I would need specific citation of case before being able to accept this as reasonable proposition.  I am continuing to try and find such validation, but have yet to achieve a result that would propose it to be valid to a level I would personally find to be back-able. If you know of such a case I would be highly supportive of a posting. ..


the larger goal for me is to hopefully ensure that people do not pursue "frivolous litigation" base on non-verifiable statements of personal belief.  I am not proposing that you are presenting such and argument, but would love to see case that presents that there is viable reason to believe this is the case. "frivolous litigation" can often result in a buyer being liable for costs in a manner not suspected prior to litigation.

I fully express that I don't claim that I my advise is legally accurate or to be construed as legal advise.  In a situation, that seems to be contrary to a common theme exhibited by law, I do request that you might provide demonstrated example or definitive definition to the contrary.   As my concern is it may falsely empower a consumer to pursue a route that leads to more harm than good.  Suing an entity on a nebulous reason is hardly a profitable on a good day, unless the desire of success is measured by a level of person interpretation of morality.

Full disclosure, my prior education is in civil rights and discrimination.  This is my first foray into consumer right and UCC.  Please demonstrate example or advise on the side of caution.  Even though none of this should be reasonable considered legal advise, please ensure your example errors on the side of measured  constraint.. ..I would love to keep names/specific circumstance out of the discussion, but at time seems unavoidable.   Remember your expression may lead a buyer or seller to pursue a "cure" that may end badly or with loss.  Consulting a lawyer (imo) with cash in hand, doesn't necessarily lead to the best personal decision.  In my personal experience, there are often lawyers willing to take cash in pursuit of something that will later sour to results that doesn't resolve the way a buyer/seller may hope.

Again this thread isn't about Xian, it's about UCC consumer protections.   and this particular code was referenced in regard to the previous section posted. . consider the section on termination and this specific code together. .. if this was not clear please accept my apologies and regroup with it being clarified

I honestly do not understand what you meant here.

The right to termination exists only for contracts for successive performance that is indefinite in duration, such as a subscription.

Otherwise, once the contract was concluded between the parties, it is a done deal.

Is there a citation to this effect? I don't oppose you on this. I just would love to see the verifiable court opinion.  As a buyer I truly hope you to be correct, but I'm hesitant/unwilling to pursue based on conjecture.. .granted the discussion has been primarily conjecture, but in optimistic pursuit, I'd hope for verification of belief.

You yourself cited the law in this respect (see section (2)).

Please break this down (I claim total noob concerning implied "contract of sale" and hope for a layperson digestible explanation)

My biggest thing here is you are willing to propose optimistic opinion, please offer case citation.  If your a lawyer, this is not even an after thought.  If you are not this is a due responsibility to offer hope to a person seeking pursuit under these regulations.

This thread has really taken off since I last posted!  There is a lot of information in this thread, some of it correct.

I think the best way to explain the BFL situation from a legal perspective is by using a fact pattern (lawyers love fact patterns).

MSantori buys a widget from Widgetco for $100. Widgetco's website says: "We don't know when you'll get your widget, but we promise we'll ship widgets when we receive them from the manufacturer, and in the order in which we sold them. All sales are final."

If, a month after purchase, Widgetco refuses to ship its widget to MSantori, and instead "cancel's" MSantori's order by refunding him his $100, then Widgetco is in breach of a material term of the contract.  MSantori's was probably not a contract "absent a specific time provision" There was a specific provision as to time: "when we receive them from the manufacturer, and in the order in which we sold them."

WidgetCo would be liable to MSantori for his "expectancy damages": the value that MSantori would have realized but for the breach.  What would MSantori have if not for Widgetco's breach?  At the very least, he'd have a widget.  How can MSantori get a widget now?  Well, if a widget now costs $300, then the measure of MSantori's expectency damages is at least $200.

Next up: What else can MSantori get besides the $200?  Can he also get the value of all of the money he would have made from the widget?


edit: clarified damages

So it is a "specific provision as to time" not a "provision as to a specific time". I don't know how I missed that. /slaps forehead
Now that makes a lot more sense.  :D

This got glossed over a bit.  Especially concerning (3) .   Doesn't this trump our contention of the previous point.  Sorry I post so much stuff, but I'm a fast typist and am trying to distill this in the face of confusion.

OK I get this, if Widgetco terminates with an explicit reason of non-delivery.  What if Widgetco has a thousand orders and tells 1 we don't want to do business with you for non-breach reasons? That's not an expression of intent not to deliver (repudiation) but an expression of a desire not to do business with an individual.  (scroll up I posted some law).   Is there a difference?   How does that affect pursuit? What cases has this happened within previously?

"Termination" occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach.

"Pursuant to a power created by agreement or law". There is no power created by the contract that Xian agreed to that allows BFL to unilaterally dissolve it. There has yet been no law cited which grants BFL a unilateral right to dissolve the contract rather than fulfill it's terms.

Also, please see the fact pattern put forth by MSantori. Furthermore, MSantori claims a law degree and a passing score on the bar exam of the state of New York. (may the great flying spaghetti monster have mercy on his soul).

did that

Widgetco can choose not to do further business with them (providing they do not violate any discrimination laws). But they cannot choose to unwind previous business protected by contract on a whim.  

How would the reason for non-delivery be "non-breach"? Failure to deliver is a breach of the contract, there must be some mitigating circumstance to that failure for there to not be a breach.

A fact pattern that illustrates the need for sales contracts to remain intact:

I run GoldBuyer Co. I offer to sell people gold for $10 below spot price and I guarantee delivery of gold within 3 weeks. The customer pays the full amount at the time of purchase. I actually only buy the gold 4 days before I deliver it.
My business model is as follows:
If at the time I purchase the gold the spot price for gold is higher than the amount paid by the customer, I dissolve the contract and give them a refund. I make money on 16 days of deposit interest.
If at the time I purchase the gold the spot price for gold is lower than the amount paid by the customer, I fulfill the order and ship the customer their gold. I pocket the difference between the spot price and the price the customer paid for the gold. I also make interest on 16 days of deposit.

If sellers can unwind any contract they choose citing only that they don't like the customer, bad things happen.

Your fact pattern is a good first approximation. (The difference is that In the case of BFL, it is also the manufacturer of the goods.)

I also agree that "if a widget now costs $200, then the measure of MSantori's expectency damages is at least $200."

Earlier, some members asked for caselaw (authorities) on these points. Would you be able to refer them to cases where such damages were awarded for the seller simply "cancelling" the order o the buyer?

Excellent point.

I typically happy to give some very general legal principles on this forum for warm fuzzies, and occasionally a kind soul will send an anonymous BTC donation to my public wallet address. But pulling case law comes a little too close to legal advice, which I can't really give without a more formal engagement. Bummer :(

In any event, this is a very fundamental point of contract law: it is a failure to perform resulting in breach of a material term of the agreement,  and expectancy damages.

The issue of whether Widgetco likes MSantori is not relevant to the contract analysis.  The relevant issue is whether WidgetCo performed or not. This is governed by the concept of anticipatory repudiation: When the party obligated to perform under the contract unequivocally manifests an intent not to perform a future obligation, that party breaches the contract.  Or, as wikipedia (yeah, we use that sometimes) puts it: "a declaration by the promising party to a contract, that he or she does not intend to live up to his or her obligations under the contract."

Unilaterally cancelling and refusing to ship an order is a great example.

Total Respect on that point of too close to legal advise.  (btw I've seen that signature before ^ ^)  The crust of my question falls to, does a seller have no right to terminate for non-breach reasons after funds are received? Is there a circumstance where they could?  If it's too much to ask for a personal opinion for your safety error on the side of caution, not constituting legal advise, but admired opinion.


Btw I might devil advocate but all honest contribution is truly respected


I'm trying (perhaps feebly) to distill this convo into a summary to put in the starting post.  I'm hoping for some definitive answers that buyers can view the commentary on. your only the admitted lawyer I've encountered on this thread.

I don't understand what you mean by non-breach reasons.  There are some affirmative defenses to a claim for a breach of contract, but none of them apply on the facts of my example.

How much would you need to start this process of taking widgetco to task over this breach ???

I also would love to hear the finale to this question.  I assume you proposed it in an offer to answer it in a "theoretical" academic perspective. ;) woo :D

I have got a spare btc lying around to start a fighting fund to follow this through !!!!

Honestly I think we cant raise 10-20 btc to get BFL to be held to account ...We not only have Xian but also another user who was dealt with in the same way

by non-breach reasons I'm specifically referring to:


I'm think of this with a perspective that neither party has claimed breach.  One party issues a notification of Termination the order.  Is this a misnomer that either party has this right?  Without complain of breach prior to this termination, what is your opinion of academic rights of both the buyer and seller?  (Sorry I'm a very "wordy" person) . ... damn you common language English training!

I would respectfully ask that you take this matter to a PM and not involve this thread in a specific business or personal desire.  This thread has been created not to persecute person or entity, but to help miners understand basic rights as a buyer and sellers rights as a seller.  I hope to prevent future litigation through education.

So, in order to "Terminate" a contract, there is a need for an explicit clause in the contract or a law that specifically allows for doing so. In the absence of both, the contract cannot be terminated.

While this is a legitimate discussion too, I agree that this is not the right thread for it. But if you want to start a threat about this, please let me know.

That is the essence of the question, but for me as a layperson.  I hope to verify with an academic authority.  Not as a slight, are you proposing an, not previously stated, authority as a professor, lawyer or judge? that would be awesome as I hope to get "weight" for reputable sources.

Yes I encourage either a PM or thread to pursue your interests.  @drlukacs on the Freudian "threat" wording . ..rofl . . .just jovial jibing of somebody I respect.

In addition, what rights are there in an undefined contract?  Are they explicitly denied a right to termination because the contract itself is undefined? or is that an implied right?

I admit, you caught me -- it was a Freudian slip. :)

What do you mean by an "undefined contract"? Contracts of sale at least define the item sold and the price.

In which state would Customer A have to file to seek restitution if the transaction took place over the internet?
The state where Widgetco is located? Or the state where Customer A lives?

I'd donate some bitcoin for a fund that goes after BFL and helps out Xian.... anyone else want to get JOHN K. to escrow that?

 I am terrible with math.

 Would a kind soul be able to calculate the BTC earnings of 120GH/s (Two 60GH/s Single SC's) worth of processing power sustained to present day, assuming I took delivery of my pre-orders on November 1st, 2012.

 It would be most appreciated.

EDIT: 1 BTC reward to the first person that posts a Google docs with an accurate assessment.

It wouldn't feel right asking the community to donate money for my legal pursuits. I've thought about it, but it doesn't sit well with me. I need to deal with this myself.

The only way something might feel right, is if it was for a forums based advertising account, where all proceeds donated would be used as a "Butterfly Labs Truth-in-Advertising" fund, that would link to a post vetted by a core group of people to have a unified message. JohnK (if he is comfortable with that) or some other trusted source or neutral third-party could be the OP that would only update text after a consensus was reached by a core group.

You will need to gather historic data on past level of difficulty. I suggest using an Excel spreadsheet.

If Widgetco advertises in the state where Customer A lives, then it already creates a real and substantial connection to that state (which is the test, at least in Canada, for jurisdiction). If the contract of sale provides for delivery to Customer A's address, then it strengthens the tie to that state, and makes that state the right forum for taking legal action.

Assuming BFL was wrong in cancelling your order, and assuming that they are required to pay damages for "lost potential earnings"  (both of which are very big ifs) then earnings from November 2012 on are incorrect.

Your potential earnings from November 2012 to today are exactly zero.  With the tenuous exception of Luke-Jr's "Single", which is a prototype that never left BFL, not a single customer has received a 60GH/s miner.  If you were unhappy with your pre-order not making you any money between then and now, you could have asked for a refund.

They question you should be asking, is "How much in BTC earnings would 120GH/s of mining power earn between June 2013 and June 2014?"



grnbrg.

 With all due respect, and I know you have done a great job in running the Twitter feed and keeping the community up-to-date, you are a shill. A paid-for-and-bought shill. Tell Ivan I say "Hi."

 Forgive me for adding you to my ignore list. I would recommend you return to the safety and sanctity of your Butterfly Labs shout-box and continue to drink the koolaid with it's participants.

You do realize that was not "Hur, hur, hur, get a refund, then!", right?

You were talking about calculating your potential earnings from November 2012 to the present.  My point is that you could have asked for a refund at any time within that period, but didn't.  So I don't think you would be entitled to "damages" within that timeframe.  And that those damages would be zero in any respect.  I suspect that earnings calculated for a 12 month period after you would have received your orders would still be quite substantial, and are a much more justifiable target for damages.

And lastly (and as a non-lawyer), while I personally think BFL probably has the legal right to act as they have, it was a shitty thing to do, and they should not have.  But on the other hand, you appear to have worked very hard to make it happen.



grnbrg.

PS:  Ivan says "Hi." back.  Or something like that.  :D

As to calculation of damages. I would point out that it would be impossible to calculate accurately. Since we would have been dealing with vastly different difficulty numbers if BFL had actually delivered last year. Since they didn't I don't see how you could reasonably determine the damage between order time and the time the order was canceled.

I was thinking the same thing. One could only estimate.
If BFL had delivered 120GH/s to Xian in November 2012 then one could use the earning power of the early Avalons as a comparable case. 

Yes, I was hoping to treat it as an estimate. I wanted to divide the actual 120GHs figures in half or possibly even down to a quarter for a more possible present day valuation.

My gut is telling me the number of BTC is not insignificant after making either adjustment.

My apologies!

Very nice thread, Endlessa.

Peace.

~Bruno~

I really don't think he could nor should he as this would set a dangerous precedent. What if the value of said goods that widget was to create went down? Can the manufacturer of said widget be held liable for that?

For another perspective. Lets say I make gold mining equipment. I state the performance of said equipment will be <x> equipment performs to that standard. However gold prices have dropped. Am I liable? Lets take it a step further, I don't sell you the equipment, you find another source for something similar. But it takes longer to get delivered. However the price still goes down. Is the manufacturer liable for the loss? And how much of the loss?

Sorry that was a bit of bad wording on my part.  :) It was late and I think I was getting tired.  Towards the end of the night I was reading about contract termination.  I did run across several places were termination was being discussed.  In turn, I realized that most of the places'/businesses have this ability are using "Terms and Conditions" that contain explicit termination clauses.  By "undefined", I meant in the absence of a terms and conditions explicitly expressing a termination rights or expressing specific delivery dates, it seems that this then falls to whether  or not the local jurisdiction has additional laws that qualify a seller or buyer for the right to terminate the contract of sale.  Otherwise, both parties are locked into an infinite contract of sale until they mutual agree to adjust the terms to allow for a mutually agreed upon exit.  

Sellers (there are a couple new ones in the US and Europe), most likely, should explicitly address this section of UCC through terms and conditions to ensure their right to address their needs.  Otherwise, they are relying on the "chance" that local law might supply an exit.

Buyers should be aware of any terms and conditions (especially concerning terminations, cancellation and refunds),  as those can extend additional rights to the seller when accepted at the beginning a contract of sale or renegotiated by both parties later.

I'm hoping to distill this into the edit section of my starting post.   This stuff is so much more nuanced than Civil Rights :)

Oh btw here was a great article I found last night http://legal-dictionary.thefreedictionary.com/Seller's+Obligations. I'll put it as a reference on the start topic.

Something else interesting I ran across that I never realized.  It appears that with this kind of implied contract/warranty even casual conversation can affect the terms. Example:  Buyer: "Hey I'd like that in pink box man." then seller, "Absolutely!". At first glance, my intuition says that's hilarious.  After some of the reading I've been doing,  That could be construed as a newly created condition on the sale.  I'm starting to think that buyers and sellers both should be very careful with direct communication and indirect communication. IMO, casual internet communication between buyer and seller should be all together avoided (aside from mutual assurances that things will be paid for and products will be delivered).  I could be off base on this, but .  . . Most of these laws seem to have been written back when people talked face to face and signed physical paper (yes, of course they were).  Words become more powerful when written in text than they were when spoken to each other.  If it's written in text because binding for a lot of these statues and codes.  This can be dangerous for both buyer and seller.  Seller can unintentional create new terms and so can the buyer.  Then you can also end up documenting your own repudiation.  Especially considering what seems to happen on the forums.  Statements like, "People should cancel their orders", "I should have cancel my order", "I should never do business with those guys", etc could possible be construed as intent not to perform on the part of a buyer, imo.  It's a funny world, but I don't consider business funny.  Anyhoo, that's enough of a rabbit trail for now :)  let me know what you think. Sorry for rambling, but the more I wrap my head around this, the more exciting understanding it is becoming :)

Again Guys I appreciate your need to discuss Xian, but please do it in the Thread about that topic.  This is a thread for academically discussing consumer rights and hopefully generating awareness for people seeking knowledge.  It's not a thread to gain legal advice or support, as that should be done with a lawyer or minimally on your thread.  


Thanks ahead of time for respecting that.

I respectfully disagree. The point is not about getting back the money in November 2012, but rather getting delivery in November 2012. If delivery is delayed, and it affects the earning capabilities of a person, then these are legitimate consequential damages that are payable by the seller.

You are certainly not responsible for any change in the gold prices as long as you deliver on time.

If you fail to deliver or deliver late, then the price of the gold between the reasonable time of delivery and the actual time of delivery affects the amount of lost earnings and thus the consequential damages.

I agree that the additional laws may be relevant, and that is indeed the reason for such laws to be in place: to govern contracts where the terms and conditions do not address a specific topic. The difference between UCC and more specific consumer protection laws is that the latter cannot be "contracted out" -- in other words, a provision that states "This Act does not apply" is invalid. On the other hand, in some jurisdictions, UCC-like legislation can be "contracted out" by explicit language in the "Terms and Conditions".

You also seem to be mixing "indefinite contract" (which is something like a subscription) with the contract for the sale of a specific number of units of a specific goods.

The point I was trying to make is that if the price had gone up it is unlikely that a complaint would be heard, so you can't have it both ways. Calculating damages on a speculation sets a very bad precedent. Not to mention that there is an element of luck involved in the whole mining area. Say you got your widget, then the pool you were on ran into a streak of bad luck and didn't find as many blocks as it usually does. Is the manufacturer liable for that as well? Or say UPS looses your package and it's delayed for a week, do you sue the manufacturer for lost revenues?

I will agree that any damages should be the difference in price for a equivalent replacement. So if company X sold a piece of hardware that specifies that it could do 600 calculations a second for 5k then canceled said purchase and refunded the 5k. And company Z sells something that can do the 600 calculations a second for 6K then the damages should be 1k.

That to me make sense and is consistent.

The question is not what you think is right as compensation, but rather what the law says about it.

Damages, like many other things in civil matters, are calculated based on balance of probabilities. The average revenue of a given hash power is well known. So is the exchange rate between BTC and USD.

If a reasonable delivery date, according to the court, was November 13 (I just made up a date), then any reasonable loss of revenue caused by the failure to deliver by that date is the liability of the seller. If the price of gold/BTC/whatever was low during that period then the liability is smaller. If the price was high, then the liability is higher.

The manufacturer is not liable for back luck, of course. But the court will look at the average revenue that such a device can generate. You must remember that this is not a criminal "beyond reasonable doubt" type of case. If you have large pools, and your mining capacity is relatively small compared to it, then the standard deviation/variance of your revenue will be very small. So, based on the Central Limit Theorem, the probability of obtaining near-average revenue is well over 50%, which is what one needs for "balance of probabilities".

UPS losing the package is a slightly different story, depending on insurance, and transfer of title issues. It is a more complex case, but of course it requires the seller to be able to prove that the item was indeed sent.

Several other questions regarding Widgetco. :

Would Widgetco be allowed to use the money they collected from pre-orders to run research and operations before they have shipped the orders?
How would that money be accounted for on the balance sheet?
Would sales tax have to be paid when the item is shipped or when the money changes hands?

It is a good question, but I am not sure if it is relevant to consumer protect and contracts. This is more a question for an accountant.

I was musing about damages and what Widgetco might do with the pre-order money. Did they use it as an investment or loan for operations? Did they earn interest off it? If so would interest over the course of the order be considered part of the damages?

What they do with the money does not affect the damages, unless their actions demonstrate intention to defraud, in which case punitive damages may also be sought.

Your grounds for damages is the non-performance on the contract and its consequences. What they did with your money after you paid it to the seller is not really your business, unless the issue of fraud is involved.

From a pure breach of contract perspective, Widgetco's use of the money isn't relevant. It might be relevant for some other causes of action, as drlukacs suggested.

Wow grnbrg, I'm so used to seeing your name, it kind of surprised me to see that you only have 8 posts on BCT.  Do you have another nick as well?

This threat is for legal questions and discussion. I am not sure how your question is relevant to the topic of the threat.

As promised, let's discuss now how WidgetCo might be liable for more than just the cost of the widget.  Let's assume that MSantori is in business for profit, and he ordered the widget for his business.  Further, the widget really only has one purpose - to "widge"*.  It was designed for this purpose and really doesn't have any other practical application.  "Widging" is a process by which the widget generates diamonds, a valuable item in MSantori's and WidgetCo's communities.  If MSantori would have had his widget, he estimates he could have generated another $300 worth of diamonds - roughly - since WidgetCo should have shipped the widget.

Is MSantori entitled to an additional $300 from WidgetCo?

In New York, lost profits are a form of consequential damages.  They may be recovered only if three elements are met: the damages were "certainly" caused by the breach, the actual amount of the loss can be calculated with reasonable certainty, AND the damages were fairly within the contemplation of the parties at the time of entering into the contract. Applied to my fact pattern, Widgets only have a singular purpose: widging.  There is no doubt that, if he had received the widget, MSantori would have set it to widging and generated valuable diamonds.  The first element, I think, is satisfied.  Skipping to the third, there is no question that, since Widgets only widge, that Widgetco and MSantori would have considered that had Msantori not received the widget, he would be unable to widge and would lose profits. The third element, I think, is satisfied.

What about the second?  Can we calculate the amount of the loss with "reasonable certainty"?  I'll leave that to the forum.  I'm interested to hear what you all think!


*I am from the US, so if this word means something vulgar in some other country's slang (it really sounds like it should), understand that my use of it is not intentional.

I don't see the time since order 1 as unreasonable in the slightest. Others in the industry would tend to agree, especially given that bfl ain't exactly a multinational all in one house.
IMHO.

Forgive me as I am a layman, but how can you establish that any "profit" is lost. I say this because mining for bitcoin is not a guaranteed undertaking. If someone purchased a 5 ghz miner from widgetco and tried to solomine, it is almost certain he would,never mine any bitcoin. did widgetco ever promise their products to make you bitcoins? Widgetco only promises the chance to, and that chance is not at all established as there are many variables.

If widgetco sold shovels, and didn't deliver can you sue them for  lost of profit on crops, gold, constructin( etc various uses of a shovel).

I'd be very curious to follow any of these case if they ever come to fruition.

To add to my train of thought, I'd like to add this. Whenever someone not bitcoin savy asks me about bitcoin mining, I tell them that its very much like buying a lottery ticket. They more hash rate you hold, the more tickets you have.

So, question is, if you were in a lottery pool, and you gave person A money every month to buy tickets, and you find out a year later he never did. What are you entitled to? The price of the tickets, or the lottery jackpot for every jackpot missed?

Couple of ways of proving damages.

First of all, there are many Pay-per-Share (PPS) pools, such as 50BTC or deepbit. There, you are being paid exactly based on the number of shares that you submit [which is in direct proportion to your hash power], and not based on your or the pool's luck.

Second, as I mentioned earlier, the proof has to be only on balance of probabilities, not beyond reasonable doubt. So, especially if we are talking about a length period of many months, the Central Limit Theorem (http://en.wikipedia.org/wiki/Central_limit_theorem) does provide a high probability estimate of the sum of the wins/loses.

Membership in a large pool significantly decreases the variance (standard deviation) as well.

I warmly recommend the paper by Meni on the various pool reward systems, which also explains these issues from a probabilistic point of view: https://bitcoil.co.il/pool_analysis.pdf


Neither. What you are entitled to (if there were sufficiently many draws during the time that the person failed to buy tickets, and so the Central Limit Theorem applies), is the expected value of this process: It is the sum of the probability to win on a given draw times the amount that one can win on that given draw.

A much better example would be loss of use of a taxi or a (self-employed) lawyer's inability to work for a month due to an accident. While one cannot exactly predict how much money they would have made, their historic income/revenue can be and is often used to approximate that, if there is no other reason to believe that their income would have been different.

So you say that in the lotto case damages are defined/quantified as " the sum of the probability to win on a given draw times the amount that one can win on that given draw." If this is true then the probabilities to win the coin are horrendous for non pool mining. I couldnt see that netting a very large income stream lost using that as a measure.

Lets say we can quantify bitcoin mining earnings as income. However in the case of the taxi driver or lawyer, they are performing a service industry job that has a standard pay scale(for the most part).  A Bitcoin miners' future income with all things staying constant will drop over time through reward halving, difficulty rises, maybe even changes in bitcoin code.

BTW, is there precedence for using central limit theorem in a case involving damages for lost income? If so please post the case. i'm  interested how it would be argued/defended and decided.

The probability over a short time is low, indeed. But the expected value is the same whether or not you participate in a pool. What pools do is they decrease the variance if your mining capacity is much smaller than the pool's. On other words, pools make the income stream more even. But they do not substantially alter the expected value (average) of the BTC. Again, I strongly suggest that you read Meni's paper on this, if you have the background to understand the math.


You are confusing loss of past income with loss of future income. In the case of bitcoin, if someone was unable to mine in March 2013, we know exactly what her/his losses are per lost Gh/s mining capacity, because we know who much the average reward is (either in PPS or in a reasonably large mining pool), the same way we know the lost past income of a taxi driver whose cab breaks down.

Lost future income is far more tricky for BTC. So, it is quite possible that one may be able to obtain compensation only from the required date of delivery to the date of judgment, and a judge may refuse to award damages for future lost income. But that also depends on the details of the case.


You may want to look up Benford's Law. It is a statistical principle for detecting forensic fraud, in a way quite similar to the central limit theorem. As far as I know, it was used in numerous court cases as evidence of fraud.

Calculating expected past performance in BTC of a mining device should be trivial. A 5GH/s device will produce a low variance stream of diff 1 shares. Each difficulty time period is discrete and one need only multiply the expected shares for that time period times the PPS rate for that period. PPS rates are based on difficulty and the fee charged by the pool, so it should be easy to generate them for any difficulty time period. In fact one could probably just ask BTCGuild and get the history of PPS rates for that pool over the last 8 months.

It sounds like the simplest consequential damages from Widgetco would be the BTC that would have been mined. BTC are readily obtainable, so it shouldn't be an issue to ask for them as damages.

This is one thing that I am not sure that I agree with. "An eye for an eye, a tooth for a tooth" is no longer how courts work. But it is certainly reasonable to be asking for the dollar equivalent of the amount of bitcoin that one could have made during that period. The only question is what exchange rate should be used. (But this issue can arise also in the case of a contract in a foreign currency, and each jurisdiction has its way of dealing with conversion of damages to local currency.)

Regardless of the merit of the above statement, grnbrg is correct. The court would only award damages from the time of actual delivery, as substantiated by other deliveries. My wife is a lawyer, so I asked.

I am afraid you got something wrong. No reasonable person would expect damages for the time after it was delivered.  So, I am not sure what you mean by "time of actual delivery" in this context.

I hurt my hand, so it's hard to type. Tried to be brief and failed. You cannot compute the damages specifically until the units actually are being delivered unless the mfgr. actually GUARANTEED a delivery date. From the point they actually start delivering, you could. If they breached the contract with you then that would be a reasonable starting point for your computations.

Now you might be able to infer damage due to lost opportunity prior to that, but it would be a separate issue.

I need speech to text, dammit. This hurts >:(

drlukacs, i was actually referring to future income in the case that the company never delivers. I did meld those two scenarios together though. Excuse me, as I tend to type freely on forums as thought come to mind, and rarely proofread.

I'm still not sold on the ability to demonstrate that bitcoin mining is a guaranteed income that is quantifiable. I have quite a few ways to argue against that.

Thanks for the reference,  I'll look into Beford's law when i get some time.

You probably missed the discussion about what the UCC says on delivery times.

It really boils down to whether the delay is within what a judge/jury will view as reasonable.

In the case of a contract, the delivery is guaranteed. You cannot make a contract and accept payment for an uncertain delivery, unless the contract explicitly sets out the conditions in which you do not have to deliver or do not have to deliver within a reasonable amount of time.

When you promise to deliver, say, by October, that is part of the terms of the contract. So, damages start on November 1, and certainly last until they deliver the item.

If there is no delivery at all, that is a bit different question. In terms of the market value of the item, the price for which such items are sold speaks to that too:

http://www.ebay.com/itm/261224738700?ssPageName=STRK:MEWAX:IT&_trksid=p3984.m1423.l2649

You're right, I did miss some of it. Thought I had read the entire thread :P Ah well, live and learn.

Ohh look its Grnbrg the penis taker of BFL, finally made an account here instead of bashing every naysayer on bfls forums.

pizza: While we may not all agree with the views presented here, the goal if this threat is to have a discussion without any ad hominem.

so from that auction it looks like a 5Gh Asic miner today, is worth 30 times its original price in USD

I believe the Avalons sold for 30 grand or so. Any discussion about mining revenue is irrelevant, Asic miners are worth their weight in gold.  ;D

Xian's loss amounts to roughly 25-30 times what he paid originally (around 4000$?) so he is looking at over 100k in damages - I can understand that he is upset. His tone towards BFL was not acceptable, that is clear, but the question is: why did BFL not warn him before cancelling his orders, knowing that this would be the equivalent of a 100k penalty.  ???

And I can't believe there are people out there saying that he got his money back, where is the problem ...

Both factors are relevant: both the current market value of ASIC miners and also the lost revenue are relevant for determining damages.


The warning makes no difference. Unacceptable tone is not one of the few legally acceptable reasons for not performing a contract.

Missouri Revised Statutes Chapter 400 Uniform Commercial Code  Section 400-002.106 (http://www.moga.mo.gov/statutes/C400-499/4000020106.HTM)


I'm really not sure what it means:

"agreement"

Does it mean that a warning or threat is an agreement?

If not, then I agree:

--- snip --- (see below)

"I don't like your attitude" is not a valid reason to terminate or cancel a contract under the laws (Missouri) which apply to BFL's offices. (not sure if kansas allows this)

Edited to add:

I don't believe there was any contract saying "buyer must not say things using a tone which we arbitrarily decide is offensive"

If that sort of language was in the contract / original purchase agreement, then BFL has every right to cancel.

I'm not aware of any relevant language in the purchase agreement or contract, so there was no breach.

Edited again:

Guess I was wrong.

BFL is located in Leawood, Kansas.

It confused me because the BFL staff occasionally makes generic references to kansas city (http://en.wikipedia.org/wiki/Kansas_City_metropolitan_area) (but they ACTUALLY meant Leawood, Kansas... which is a suburb of Kansas City right on the state line... kansas city itself is in Missouri, but for jurisdiction purposes these things matter so much they might as well be in canada or something. Kansas laws are nowhere near as easy to make sense of as Missouri law)

Kansas City is in both Kansas and Missouri.
https://maps.google.com/maps?q=kansas+city+kansas&ll=38.505191,-94.449463&spn=6.567067,9.063721&hnear=Kansas+City,+Wyandotte,+Kansas&gl=us&t=h&z=7

Indeed...

Were you aware that "kansas city" in missouri is the largest city in either missouri or kansas, and most of the residents of "kansas city" are on the missouri side of the border?

That info is right in the link I posted, and even in the reply where you were quoting me just now:

https://i.imgur.com/bnJQMim.png

What if widgetco started shipping orders out of queue in response to angry customers filing chargebacks?