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Author Topic: Mt.Gox and void trades: Force Majeure  (Read 12258 times)
MagicalTux
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June 21, 2011, 09:36:53 AM
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Hi,

For all those willing to sue Mt.Gox because we will be making trades void, please remember that criminality usually falls under "force majeure" by its externality (not like we would have ever wanted that), unpredictability and irresistibility (we resisted most hack attempts, this one was "strong" enough to go through).

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Force majeure (French for "superior force"), also known as cas fortuit (French) or casus fortuitus (Latin),[1] is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term "act of God" (such as flooding, earthquake, or volcanic eruption), prevents one or both parties from fulfilling their obligations under the contract.

In this very specific case, any "trade contract" (if you see that as such) is void due to force majeure. Subsequent trades directly or indirectly resulting from the hacking fall under the same rule.


Now don't be so selfish and stop trying to claim benefits you generated from nothing by abusing an extraordinary situation. I appreciate all the attention and all the mail about lawsuits, threats and more, but I'd prefer being working on "Stuff that Matters®".

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June 21, 2011, 09:38:13 AM
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scumbags. Your only interested in saving your own skin.

force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces

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June 21, 2011, 09:39:40 AM
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+1

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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June 21, 2011, 09:40:07 AM
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scumbags
idiot!

"The whole problem with the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." -Bertrand Russell
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June 21, 2011, 09:43:37 AM
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Sorry to be a bit off topic, these questions are vital to many people, so please answer:

1) The moment we pass the new verification stage, are we allowed to look at our account, or are there more delays at that stage?
2) Is MtGox still solvent? and/or Have they claimed to have enough funds?
3) Are there any verifiable sources about their (rumored) possible legal troubles in Japan?

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MagicalTux
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June 21, 2011, 09:45:26 AM
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Sorry to be a bit off topic, these questions are vital to many people, so please answer:

1) The moment we pass the new verification stage, are we allowed to look at our account, or are there more delays at that stage?
2) Is MtGox still solvent? and/or Have they claimed to have enough funds?
3) Are there any verifiable sources about their (rumored) possible legal troubles in Japan?

1) Passing the verification may take some time if there is a lot of users. We'll try to make it as fast as possible.
2) No funds were stolen
3) Legal troubles?

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June 21, 2011, 09:46:48 AM
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looks like i might be loosing BTC 1000 due to mtgox...

but lucky me i got another 1000 in Tradehill Smiley

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June 21, 2011, 09:48:07 AM
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Legal troubles?
Just rumors, links to some guy with a blog getting posted here.
I'm still a big fan, and hope you get well soon.  Smiley

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June 21, 2011, 09:49:05 AM
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3) Legal troubles?

Even if dismissed, lawsuits count as "legal troubles".  I personally wasn't affected (fortunately).

Although I have to admit, I am really unsure how you could roll back all the trades or have nothing be stolen... did NOBODY withdraw ANY of the BTC they bought during that time?

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MagicalTux
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June 21, 2011, 09:49:27 AM
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looks like i might be loosing BTC 1000 due to mtgox...

but lucky me i got another 1000 in Tradehill Smiley

1000 BTC you had and lost, or 1000 BTC you gained from some guy selling at prices as low as 0.01 USD per btc?

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June 21, 2011, 09:50:57 AM
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3) Legal troubles?

Even if dismissed, lawsuits count as "legal troubles".  I personally wasn't affected (fortunately).

Although I have to admit, I am really unsure how you could roll back all the trades or have nothing be stolen... did NOBODY withdraw ANY of the BTC they bought during that time?

Some people did, we'll leave those as negative balance and count it as loss if not solved.

As for lawsuits we got threats only so far.

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June 21, 2011, 09:52:28 AM
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1000 btc i had but i really doubt mtgox will come back
i also dont care cause im a USD-millionaire already so BTC is just a playground for me... all the gains i get from playing the market i put into charities.

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June 21, 2011, 09:52:43 AM
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3) Legal troubles?

Even if dismissed, lawsuits count as "legal troubles".  I personally wasn't affected (fortunately).

Although I have to admit, I am really unsure how you could roll back all the trades or have nothing be stolen... did NOBODY withdraw ANY of the BTC they bought during that time?

Some people did, we'll leave those as negative balance and count it as loss if not solved.

As for lawsuits we got threats so far, nothing yet.

Makes sense.  I fall into that third camp of opinion on this whole thing of "Wow, there is enough 'suck' to go around for everyone".

Can't imagine you're getting much sleep right about now.  Good luck.

Be fearful when others are greedy, and greedy when others are fearful.

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June 21, 2011, 09:52:57 AM
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1) Passing the verification may take some time if there is a lot of users. We'll try to make it as fast as possible.




Do you have any idea when MtGox will be open to trading?
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June 21, 2011, 09:53:01 AM
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Any ETA on date of first trades, after the 24 hours?

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MagicalTux
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June 21, 2011, 09:53:56 AM
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1000 btc i had but i really doubt mtgox will come back
i also dont care cause im a USD-millionaire already so BTC is just a playground for me... all the gains i get from playing the market i put into charities.

We will.

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June 21, 2011, 09:55:53 AM
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I agree that nullifying trades resulting from massive exchange-related fraud is probably the best option.

But no matter which decision is taken, there will be some quite pissed off people, so it would be prudent to keep a good lawyer on retainer...
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June 21, 2011, 09:56:33 AM
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For all those willing to sue Mt.Gox because we will be making trades void, please remember that criminality usually falls under "force majeure" by its externality (not like we would have ever wanted that), unpredictability and irresistibility (we resisted most hack attempts, this one was "strong" enough to go through).

This is an interesting stand on that.

In other cases I know, it varies.

If someone would say tap into your phone line and make your number call these high-payment numbers (that cost x10 or x50 more per minute), then it is no excuse and still the person needs to be pay the due bill.
Even if it is just a regular person, versus hackers and versus big telecom.
Not saying that this is good thing. This is probably bad that it works this way especially as phone (land line) user can't really be at all responsible or can at all defend from someone tapping into cables box near his home.

Same thing with viruses popular in older days which called a high toll numbers from computer modem - dialers. But perhaps there where exceptions, not sure how it worked in most jurisdictions.

Sleeping over it, I thing most juts thing to do would be if any hacked exchange in this position, e.g. mtgox here, would reverse trades, then refund all lost income to people gaining on the fall, then try to find and sue the hackers responsible or sue other responsible.

In mtgox case, I would "kill" the auditor already. And sue the crap out of him.

Questions arise

1) Was it a private auditor brought in voluntarily by mtgox, or was it some forced, government thing to audit your company?

2) what with few people gaining with say @10 trades, @12 trades, @15 trades and so on






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June 21, 2011, 09:56:50 AM
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Hi,

For all those willing to sue Mt.Gox because we will be making trades void, please remember that criminality usually falls under "force majeure" by its externality (not like we would have ever wanted that), unpredictability and irresistibility (we resisted most hack attempts, this one was "strong" enough to go through).

Strong enough to go through in itself does not mean you can prove you did everything you possibly could (within the boundaries of what is reasonable) to prevent this from happening. That is still something that could very well be the main question in a lawsuit and something that would be at least under heavy debate, given the "evidence" we've already seen so far.

So please, get off your high horse. You just took the option that you knew would cost YOU the least, after you got hacked due to a lack of security that was already pionted out to you and are now calling OTHER people greedy...

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June 21, 2011, 09:58:53 AM
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http://www.alway-associates.co.uk/legal-update/article.asp?id=48

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Force Majeur, Acts of God, and Others

Many of our clients have raised questions over the status of Force Majeur, Acts of God and other similar clauses in construction contracts.

The subject is hardly at the forefront of construction legislation but nevertheless it is worth revisiting.

Force Majeur is a French term which was introduced into English Case Law in Lebeaupin v Crispin as

All circumstances independent of the will of man AND which is not in his power to control

Vis Majeur is more commonly known as An Act of God. Such a term is rarely seen in construction contracts but is noted here to identify that the phrase is narrower than Force Majeur because, arguably, some acts of God are with in the power of man to control.

I ChemE form of Contract defines Force Majeur as

“……. any circumstances beyond the reasonable control of a party which prevent or impede the due performance of a Contract including but not limited to war or hostilities; riot or civil commotion; epidemic; earthquake flood or other natural disaster;………

Similarly MF/1 standard Form of Contract defines Force Majeur as war, hostilities…….ionising waves…..radio activity……..pressure waves…….revolution…….riot…….any other circumstances beyond the reasonable control of the contractor.

JCT forms of Contract list Force Majeur as a Relevant Event without defining its meaning.

Most other standard forms of construction no longer use the phrases Vis Majeur & Force Majeur and are more specific in dealing with actual circumstances beyond mans will and control. In such event no automatic entitlement exists which affords either party to rely on a Force Majeur clause.

Where the terms and conditions of contract do make an expressed provision for a particular circumstance then those terms and conditions must prevail.

However circumstances such as weather may not be expressed in the terms and conditions and it is typically this scenario where the question of liability for the parties costs, time and damages arises.

The ICE and JCT both deal with weather by limiting the Employers liability to granting and extension of time only in the event of exceptionally adverse weather. Accordingly the Employer therefore loses his right to recover LDs for this period and the Contractor is unable to recover his own delay costs. In this scenario the costs are said to “lay where they lay”. This can be described as a Neutral Event as neither party is suffering or benefiting from the circumstance.

When the Contract is silent on such a matter, ie there are no expressed clauses to deal with the circumstance, then the parties cannot recover their costs from each other and again costs will lay where they lay. LDs would however become chargeable if Contract Completion is overrun as no extension of time remedy is available to the Contractor.

Author: Nigel Clayton

Date: September 2004

http://www.investopedia.com/terms/f/forcemajeure.asp#axzz1Pu4aA2At

Quote
What Does Force Majeure Mean?
A French term literally translated as "greater force", this clause is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations.
Investopedia Says
Investopedia explains Force Majeure
This clause is meant to benefit both parties in a contract. Force majeure would come into play, for example, when you buy a house. If the house is destroyed in a fire caused by a lightning strike, neither party remains obligated.

Read more: http://www.investopedia.com/terms/f/forcemajeure.asp#ixzz1Pu4fNzbQ

A Force Majeure must be included in a contract to be valid. There is no contract between mtgox and users; hence no case for force majeure.

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