Contracts

I'm still really new to SL, though I'm enjoying it immensely so far.

One thing that has struck me, though, is that there doesn't seem to be any way of enforcing in-world contracts other than just complaining loudly if someone doesn't honor it, which seems problematic at best, especially as the world grows.

In particular, there seem to be problems with land rentals and with forming groups to administer land, because people can't count on others to be reliable.

Would it make sense for a group of people to get together and back something like an in-world Contract Arbitration Bureau?

A CAB could license public notaries, who in turn could record contracts to a central system. Then when parties want to agree to contracts with each other, they could visit a notary, pay a small notarization and registration fee, and the notary would record the contract.

A CAB could also license arbitrators to resolve contract disputes. So if someone has violated a deal, you file a request for arbitration and pay a fee, and the arbitrator works with the parties to resolve the dispute.

Of course, the results wouldn't be directly binding -- a CAB wouldn't have any power to directly enforce it's rulings. But it could generate peer pressure by recording black marks against anyone and keeping them as a matter of public record. So if you were looking to rent property from someone, you could look them up and make sure that they hadn't broken any contracts.

Since there isn't any "government" performing this function like in RL, this seems like a reasonable way of providing this service through the free market.

Thoughts?

First off welcome to Second Life Strangew.

Published names of SL residents with "...black marks..." would probably be a violation of the SL TOS.

Trust is the glue that binds SL Commerce - and if you want enforceable contracts, my suggestion is to use the standard RL methods, that clearly reference the SL venture.

Thanks.



Assuming it was only the name of the avatar, why? I haven't read every last word in the TOS, but if there's something wrong with this, I haven't found it yet.

To date there exists no form of contract enforcement. And there probably won't exist for the forseeable future.

Welcome to SL, hun!

Enforcement would work like a credit bureau. If you develop bad credit, other creditors won't give you any more credit, or will only do so under onerous terms.



Thanks!

I'm totally not opposed to this idea, and I wish you good luck implementing it. I still think you'll find significant hurdles, however.

I have absolutely no doubt of it.

The two biggest hurdles I know of:

1) Gaining adoption. If only a few people use this, it won't have enough data to be useful.

2) People who switch to a new alt or ditch their SL accounts entirely. You can prefer to deal with long-standing residents which will help, but people can still do this if they choose. This will always be a risk, but some kind of system still should be an improvement.

I would happily use this sort of arbitration system. If you need some sort of help imlpimenting it, let me know, I'd love to contribute.

I can't imagine how they will do this in a game that enables alts and enables people to take on fictional characters unlike their RL selves -- the main selling point, which is "a second life" unattached to one's first. We must resign ourselvs to a world without contracts.

But then we must find ways to protect ourselves. Mafias emerge in such games to enforce the contracts in the absence of the rule of law.

In Russia, there are two kinds of "contracts". There is "dogovor" which means an open agreement, a pact you talk about and make" and "zagovor" which is a plot, a conspiracy, something secret -- both have the root word "govor" to talk, and one has the prefix "do" meaning "up to" the other has the prefix "za" meaning behind. I don't know if you can get the meaning here, but the point is, in a closed society, like Second Life, more like communist Russia than it knows, contacts tend to get forced in ugly ways in the absence of the rule of law, i.e. open agreements openly arrived at and transparently enforced, and and that absence ranges from expulsions from the game "for any reason or "no reason" to griefing builds with extortionist price tags to encourage sales to remove headaches.

So I come back then in this nasty situation caught between oppressive game company and repressive mafias to the communal apartment. Never ideal, and also a venue for bad construction like the Khrushyoby, the trashy cheap apartments of the 1960s, still, they offer some conveniences.

In SL, you make the group officers be the only one to control land. Maybe even better, just have one officer, except then under this ridiculous commune system they made, 2/3 of the members could vote out the officer. This simply has to be removed. Officers who buy land and put value into it with their work should not be voted out by mere tenants who became group members. Make two kinds of groups, if you will, one for land, making Owning Officer and Contributing Officer, etc. but fix it.

To be sure, you have to trust those officers won't sell out from under you -- unless they introduce a change like Owning Officer (orignal purchaser or highest tier payer). Lee Linden warned me of this when I first asked him to explain group land perms to me. That danger of the treacherous officer includes not just land sell-outs, but things like building deletions or other ways of removing value from what originated as a mutual investment. So you need to have both good partners and protection for when partnerships naturally dissolve as they do in a game that can become very emotional and stressful.

One way we devised was to make the groups running projects separate from the groups actually holding land. But Linden group perms are so riddled with bugginess and group ownership of land occasionally has bugs that it is not reasonable. I sometimes make an object, set it to group, and then can't even open it myself. Yeah, yeah, file a bug report. But still...groups sharing their tier, with officers who trust each other, with members who kick in what they can, are a really viable way to tackle the problem of managing sims. I am experimenting with it all the time to figure out how to do it better so IM me.

Thanks. Without a doubt, for something like this to ever work, it will require a lot of people to get it off the ground.

You never know the person you are dealing with on eBay, and it is trival for people to set up bogus accounts and offer goods they don't plan to deliver. Tracking reputation and using healthy skepticism regarding users with no history makes these problems manageable.



There are lots of problems that contracts won't solve -- what griefer would agree to sign a contract? -- but they should still help facilitate trust for certain types of arrangements.



It sounds like you are already working hard to adapt to the limitations on group agreements. Contracts would simply help to formalize specific terms of these relationships, and provide arbitration to help resolve any disputes that arose.

you're kinda supposed to do this before you play. that's why it pops up the first time you log in. get to readin!

I read all the click-through 50 page EULAs that every program, including screen savers, seem to have these days

Actually I have read the Second Life ToS, largely to be able to whine about it in a semi-informed manner . But having watched people install software I know that they just don't. The best one I've ever seen was google's for some service (googlebar?) which starts out "Please read this, it isn't boilerplate legalese and it is for your benefit and not the lawyers".

I now return you to your regularly scheduled thread.

Strangeweather, I think your credit buro idea is a good one, and one of the rare possibly effective ideas in this area. The thing is, you don't necessarily need a lot of people to get it off the ground, you just need a lot of money.

I imagine you (or someone) could work it something like a RL credit buro or assistance society: Members pay a small monthly fee and have access to a larger line of credit. There are of course all the attendant risks associated with lending money in an atmosphere in which you have no legal recourse should someone decide not to pay you back, but if you can get the flow of interest payments going by lending mostly to reputable people for long-running projects it might be possible. The other challenge is establishing trust in the persons running the credit buro. On contracts, parties to the contracts might deposit funds in escrow that are returned to them on completion of the contract (minus a fee). If one or the other party is in violation of the contract, the funds they deposited are paid to the other party (again, minus a fee).

The thing is, while something like this could work, it sounds like so much trouble that I can't see who would want to spend their SL time getting it off the ground and then running it. I'd be interested to see how it goes if you do launch something like this.

Or you could just make an event of it, "The People's court," have both sides present their cases to the jury, and keep records of the court activity for all to read.

Of course choosing the jury could be a problem, so you'd need to give both sides the standard 3 vetos or something.

I've only had a few instances where something along the lines of a "contract" was warranted. In a couple instances, I purchased land with installment payments. The seller and I simply made our agreement in IM and then saved the full conversation in a notecard. As each payment was made, I would copy the info from my account history, and send it as a notecard to the seller. Upon payment, I sent the final account history card and requested an IM confirmation of payment in full. Upon receipt of that, I (who'd a thunk?) saved it in a notecard.

Now, whether or not LL would have enforced this contract methodology is an entirely different matter. I suspect that, had either of us reneged, we would have been instructed to follow the standard abuse reporting protocols. And we all know how effective those are.

While it's a good idea, and I'd be glad to discuss your ideas with you via IM or whatever, I think the problem will be that you either have to adopt rules of contract construction that are uniform to all in-game contracts, or else you have to have the hodgepodge of rules that makes up contract law in a country like the U.S.

I'm an attorney in RL so if you want some opinions and advice that won't form an attorney-client relationship, hit me up next time I'm online.

EDIT -- Oh yeah, and then there's the problem of enforcement beyond the rating system you mentioned. But I have opinions here too.

I imagine this sort of process helps mimimize problems but Linden won't enforce contracts like this.

I must say, Haney, it's been really great to have you posting around here lately to clear up questions like these, ones that are easy but that often go unanswered. The flow of information from LL --> residents is really appreciated. By me, at least, and I'm sure by others.

This was my thought as soon as I saw this thread. The eBay system isn't perfect, but it is generally useful. We have a rating system that doesn't work already, but a system exclusively related to business relationships could be very helpful -- if it could be made to work better than the existing rating system. Of course, someone could game such a system by selling a bunch of plywood boxes for low or 0 L$ and getting their pals to give positive feedback. Maybe the feedback points ought to be multiplied by the number of $L at stake (with a minimum of 1 per transaction) or something like that. And of course, eBay exists to facilitate selling stuff in the real world with real money, and has a well-established arbitration service with teeth, plus it's backed up by real-world courts. SL is created for a broader purpose than just selling, the arbitration system is... um... limited... and the court backing is untested. And Haney Linden just posted saying the Lindens won't help enforce contracts. So it's up to the players, I guess, which is unfortunate. The population is probably too large for word-of-mouth reputation to be sufficient at this point.

I'd say one important thing would be to keep bonuses completely out of it. The point of this system would be to help identify people you want to do business with -- that's their compensation. Then again, if it's a player-implemented system, there's no Linden backing for bonuses. It's also a lot harder to get the system working.

neko

Or selling a plywood box to an alt for 1,000,000 Linden. Rinse and repeat.

I agree, though. An official business rating system would be a very good idea. It just requires careful implementation.

My original thought was that there would be notaries required to record a contract, and there would be a flat fee for their time. That would make the system impractical for small transactions, but would discourage people from selling things to themselves or each other to get ratings.

A transaction system more explicitly based on eBay might even be better -- make all the transactions automated, and record a history of transactions and feedback. Taking a percentage would discourage gaming the system somewhat, and if you could view the transaction history, you could see if the person's transactions were widespread or amongst a few friends or alts. You could also see the size of the transactions, and what they were for.

If you recorded the original listing with the transaction, you could use it as the basis for arbitration, when disputes arose.

it's a worthy enterprise and I particularly like the notion of escrow tied to the arbitration service.

One can two methods:
- low-touch: both parties submit an agreement, agree to abide by mechanism and decision of arbitration, and only come back to the arb. committee if there is a problem
- high-touch: pay for a few moments of a notary's time (good idea) and come to committee if there is a problem

As for the committee, you could have a permanent set and a rotating group. The group would sit periodically to review conflicts. Members would have to have AVs over 60 days in world, or some other time limit.

But as Jacqueline says, serious challenges:
1. how do you ensure trust of the sitting members (how do you know they're not all alts?)
2. how do you limit the liability of the sitting members so they are willing to take on the task without excessive risk?
3. even if you don't publish a list of defaulters, if you allow people to query the list, would you face restraint of trade issues? (I am not a lawyer)


Good luck. Getting something like this, or a better business bureau, working within SL would be a great thing.

At least the scammer would have to go to the trouble of having a million lindens for that to work. That's some pretty serious RL cash tied up, even momentarily. And it wouldn't change the length of time the seller's avatar was active, which is another factor I would use when looking into buying something.

When I was thinking of this earlier, it seemed overkill for anything except custom (bespoke) work, e.g. architecture, scripting, and so forth. But even for something simple you buy from a vendor, what you see might not be what you get, either due to vendor setup errors, script errors, photography that hides bad seams, etc.

eBay also allows sellers to rate buyers, which I think would be another good feature to implement. If I'm going to contract someone to do some custom scripting, I might reasonably want to know that they have a good rep in getting stuff done. But they would also reasonably want to know that I pay my bills, so we could come to some agreement about partial payment upfront, part on completion.

Some broad categories of business might be helpful, so one could know that the contractor one wants to hire actually has experience scripting as opposed to building, etc., but I'd like to think that someone who's built a good reputation overall would know better than to promise something they couldn't deliver, and setting up categories could really make the system clunky.

Overall, I think this would be a good addition along with the better item listing/finding services LL has been talking about, which seems to be something attached to the permissions changes they want to implement.

neko

Great topic. My view of the problems with these types of BBB ideas are in the areas of acceptance and enforcement. The acceptance portion is simply marketing. People need to be educated on why this would be a good thing here and why they should get with the program. I think some seminars and notcard passing may help there.

My concern has always been with enforcement. At the typical amounts of money we are talking about here, enforcement is going to be next to impossible. Even in RL dollars most people simply walk away from fraud when it is only a limited amount of money. That's why these people on TV who tell you how you will get rich quick in the Real Estate market only charge your credit card about $49.00 at a time.

Anyway, a BBB type service is worth pursuing but the best you can hope for with regards to the frauds is to make sure everyone is aware they are scum. Beyond that, I think any ideas of enforcing contractual obligations will be difficult at best. Maybe one or two instances but the majority won't even be dealt with.

If you explore this more I know I would enjoy reading about how it is going.