Breach of Contract != Breaking the Law

I recall seeing a forum post some time ago where a lawyer (at least, he said he was a lawyer) asserted that a “breach of contract” was not “breaking the law,” the implication being that were somebody to break the NDA, all Mythic could do would be to “terminate the contract” (i.e. kick the offending party out of their beta).

Like you, I’m not satisfied by an uncited forum post, so I decided to do a little digging. This culminated with a phone call to a friend who’s prepping for law school and has done research in copyright law and law as it applies within MMO-like environments (i.e. how law could possibly be applied in Second Life). I don’t know if you’ve ever played Second Life (I have not), but my friend here developed a bit of code that could be used in second life to “Imprison” somebody who comes onto your property (in digital land). It prevents random people from coming in and messing with stuff, changing stuff, taking stuff, etc, and its persistent: if you once trap an invader, he is forever trapped whenever he comes to your property. (An effective squelch.) So he essentially created a tool with which you could enforce control over your “property” in that domain. This was over a year ago and I have no idea if the code has since been undone or if it’s even mainstream: I’m not even sure he maintained it. (His interest is law, not software.) Anyway, beyond his resume, I quizzed him on this question and got a much more satisfactory answer.

A contract is recognized by law, but it is a civil issue; i.e. the district attorney isn’t going to come after you (unless a real crime can be directly associated to your contract-break). So, there is no jail time or fine involved. Still, federal law does support and enforce the termination of a contract that has been breached, as well as the prosecuting side’s right to sue for damages. The first part is clear: you break the NDA, you no longer get to play the beta. The second part is not so clear, and this was indeed the fodder behind said-forum lawyer’s argument: it would not be so easy for a game company to put a dollar amount to the “damage” they sustained from an NDA break. For instance, how much did you just lose in prospective subscriber money when an evil NDA breaker revealed how rez spells were instant before the NDA-drop? Or notes on the blackguard before the curtain was up? There really isn’t a plausible way, thus an NDA-breaker is really libel for nothing…other than being dismissed as a beta tester.

(What I will say next has nothing to do with anybody who possibly broke the NDA on accident. If it happened as an accident, then srsly: it’s ok. It’s cool, really. We forgive you. In fact, you are totally awesome. Everybody makes mistakes. Hell, I’m made of mistakes. Seriously. If you don’t believe me, you should see me try to walk sometime. It’s a riot. Legs are…well, forget this.)

This says nothing of the immorality of what you’re doing when you do break an NDA. When you clicked “OK” to the NDA and later show that to be a lie, well, congratulations: you lied. The people who have been busting their butts for years to make this game everything you can dream have just been disappointed by your pulling the curtain aside on them before they finished suiting up. That kind of makes you a jerk. And you don’t want to be a jerk. Jerks often are friends only with jerks, often end up dating jerks, have jerks for pets, and are often treated poorly by clerks and waitresses because, well, jerks are never well treated. Wouldn’t you rather be nice? Have nice friends? Get with someone nice? I would.

Nice people can make mistakes, and they may seem like a jerk when they do so. But, in the end, we know they’re really not jerks (they’re really nice) and we love them and call it a day. It’s consistent jerkiness that makes a jerk. And we have none of that around here. Except, of course, toward jerks.


~ by thade on September 2, 2008.

5 Responses to “Breach of Contract != Breaking the Law”

  1. Good post. I’m curious though, did some jerk break an NDA that you are specifically referencing here? Not that I am surprised, as I feel this happens more often than not in beta situations. We all know people who get into beta and share that experience with their friends and family, even to the point of letting them play the closed game. This is a violation of the NDA, but how many people agree with the strict sense of the NDA’s? No doubt we all agree that sharing private information with the world or a wide audience is “jerky” and just plain wrong, for all the reasons you mentioned in this article.

    However, in order to make the NDA more practical, companies should allow the beta tester to show family and personal friends the game. This is going to happen in every case anyway (unless the person lives a very hermit type lifestyle), so in effect the company is practically guaranteeing an NDA breach by every beta tester.

    My two cents!

  2. Ahh, this topic was on top of my pile. I think I saw the same forum post and I remembered (my own) constant complaining about this during my WoW days.

    It just always bugged me when people said that breaking the NDA or TOS was illegal.

  3. I was a waiter… I used to enjoy cropdusting jerks. Don’t be a jerk, waiters are people too.

    cropdusting : –noun : 1. the spraying of powdered fungicides or insecticides on crops, usually from an airplane. 2. farting and walking quickly past the jerk to pull the stench into their area

  4. One point is that there’s a difference between compensatory damages (i.e. this many people canceled their pre-orders after reading the post saying the beta sucked) and punitive damages (designed to deter behavior by punishing the contract breaker).

    I heard that the NDA on the Stargate Worlds Alpha has a clause that says you agree that you’re liable for $10,000 in damages for breaching it. In theory, they could argue in court that you had the choice not to agree to the contract, and therefore they should get $10,000. The law is still in the process of making up its mind on exactly how much of the fine print in your typical EULA/TOS/NDA is permissible and how much is so one-sided that it can’t be called a good-faith bargain. For example, several arbitration clauses have been shot down in court recently (you often agree that you’ll go to arbitration with the company instead of sue in an impartial court, only they get to pick the venue and the venues know that companies are going to pick the ones most likely to rule against the customer). Still, the time and stress involved in defending yourself against such a lawsuit would be a pain, even if you were ultimately vindicated.

    Then again, it’s an open question whether any company would actually WANT a beta NDA breach to end up in court. After all, there’s no surer way to make sure that the vast majority of your potential customer base actually READS the offending material than to file a court case that plasters it on the front page of every gaming site on the internets.

  5. @redtigeroh: Actually, the post was motivated because someone wrongfully (I felt) pounced on someone else for an NDA break, crying “law breaker!” and I wanted to set that record straight. As I wrote the article, however, I didn’t want it to come across as if I were excusing people who have broken the NDA purposefully and without remorse. That is certainly not the case. So I wanted to report the facts, but state my stance, which is – basically – if you break the NDA and you mean it, you’re a jerk; if you break it and it was a mistake, it’s cool (so long as you bring it down); and get all your facts straight before you get on someone for it, in either case.

    @boatorious: FREEDOM OF THE PRESS. Srsly. It is my biggest pet peeve regarding NDA bologna. Besides, they’re not dumb…they know people pass around beta keys and show the game to their friends. They count on it; it’s a special kind of advertising you can only get during beta…the kind where it’s a “big secret” and, well, everybody likes to know big secrets.

    @Green Armadillo: Yeah, I didn’t click Accept…my cat walked on the keyboard and well, had I seen that $10k figure I wouldn’t have volunteered to help test your not-yet-working game. So how responsible am I for passive things that happen on my computer?

    Bologna aside, if you assert that a “virus” did it, you can currently eschew all sorts of responsibility…so long as forensic examiners either find evidence of a virus OR can’t find evidence of tampering OR can’t find evidence that a virus was never there. For the record, Digital Forensics is HELL…but it’s also totally awesome, and a field I’m trying to get into. If you dig computer science, check it out.

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