

How an informal IM exchange cost one business a million dollars - grellas
http://blog.ericgoldman.org/archives/2011/03/court_rules_tha.htm

======
hapless
Judging from the article alone, this seems like a triumph for common sense.
When a guy with the title of Vice President promises you money, in writing,
you should be able to rely on that promise.

The defendants tried a variety of lame excuses for why they should not be held
to their promises, and the court preferred the common sense interpretation of
the conversation.

Bravo!

~~~
DrJokepu
An argument could be made that IM, while written in form, is actually oral
communication due to its characteristics. In fact, many linguicist consider IM
and texts as verbal communication.

~~~
slapshot
> many linguicist consider IM and texts as verbal communication

All linguists consider IM and texts as verbal communication{1}. The same for
books, magazines, and websites: the word "verbal" generally just means "using
words." Non-verbal would mean communicating without using words--such as
pointing your finger, taking an item from the shelf, or giving a suggestive
look.

You really mean "oral" versus "written."

It's not just pedantry; in cases like this the difference between "verbal" and
"oral" is part of what is at stake. And for any startup, it's important to
understand the legal language in agreements you make. The term "verbal
agreement" has become so abused by the media, but it still makes a difference
among lawyers (who might one day control the fate of that contract you
signed).

{1} A smiley-face in a text or IM is borderline, but I assume you mean
something like "NO LIMIT!" from OP.

~~~
mikeklaas
One of the accepted meanings of "verbal" is "spoken, rather than written" [1].

[1] <http://www.merriam-webster.com/dictionary/verbal>

------
Timothee
Since some will wonder, an e-cigarette is "an electrical device that attempts
to simulate the act of tobacco smoking by producing an inhaled mist bearing
the physical sensation, appearance, and often the flavor and nicotine content
of inhaled tobacco smoke." <http://en.wikipedia.org/wiki/Electronic_cigarette>

So, it's a physical object that makes you feel like you're smoking a real
cigarette. I was picturing some kind of software. :)

~~~
GiraffeNecktie
One of my colleagues recently bought one of these and has been puffing away at
his desk and in meetings. He paid $200 for his but I've seen them for about
$10 on Dealextreme. The article talks about a $45 referral fee so I guess the
markup is quite high. Interesting side note is that his "cigarette" is USB
rechargeable.

------
SHOwnsYou
I do find it slightly troubling that a single utterance of "NO LIMIT" is
enough to alter a contract.

"NO LIMIT" is not very explicit in what it refers to.

A contract signed and in place was able to be refined without additional
signatures nullifying the previous contract -- This is a scary precedent. May
there be mercy on anyone that IMs me something that could be perceived as
altering a contract we have.

~~~
gavinballard
As the article notes, the court considered whether there could be any other
feasible explanation for the "NO LIMIT" response - and Smoking Everywhere
failed to provide one.

An agreement to modify a contract is subject to the same requirements as the
formation of an initial contract - it requires a "meeting of minds" (the trite
legal phrase for it).

So to avoid taking on unwanted contractual obligations from your hypothetical
IMer, don't say "SURE, DEAL" in a situation where it might reasonably be
considered a commercial agreement :).

~~~
SHOwnsYou
I understand that the court offered to allow an explanation for the "NO LIMIT"
response, but that is not where I was going with the lack of explicitness with
the "NO LIMIT" response.

What is troubling about it is that contracts can be altered (by an IM
conversation no less) from extremely explicit verbiage to less explicit
verbiage.

But be careful to note that I am not so much concerned about the particular
case in question, but rather the precedent it sets.

More regarding this case - I am shocked a single person has the ability to
completely nullify a previous contract stipulation and provide a new one
without so much as a signature.

~~~
romey
I agree, it seems strange that the clause in the contract, which before must
have been something along the lines of "$45.00 per referral, to a daily
maximum of $XX or 200 referrals..." has been changed to simply "NO LIMIT." Add
to that the fact of how vague "NO LIMIT" as a statement is (perhaps he meant
"NO, LIMIT"?) and the dubious authenticity of the actual purchases, and it
seems strange to me that this was decided in favor of the affiliate.

~~~
kragen
The VP could have responded to "awesome!" with "I think you didn't understand
me if you think that's awesome. I meant, 'NO, THERE IS A LIMIT.'"

But he didn't.

------
mirkules
How did the court verify the authenticity of the IMs?

~~~
patio11
The same way they verify anything else: one side says "These are IMs", the
other side declines to say "No, they aren't" (wisely).

~~~
mirkules
This is where I was leading with my original question. If the IMs _are_
contested, what happens then? Do we go to the ISP? What if the session is
encrypted? Do we go to the IM service provider? Ultimately, the burden of
proof should be on CX to actually prove those are the IMs, right? Would CX
have the ability to request logs from a provider anyway, since this is a civil
case?

I think it's important to know the answers to these questions because anyone
can show up in court one day claiming to have incriminating IM chats for XYZ -
so the question is how to prove it's false, or what happens if they are false.

~~~
tedunangst
Bad things happen to people who fake documents or falsely claim real documents
are fake. Your lawyer will be disbarred if he knows or suspects and doesn't
report you. I don't think it happens because people would rather lose their
company's money, even a lot of it, before they want to go to jail.

------
bemmu
So basically one affiliate was generating sales of $50000 / day for these.
Impressive.

~~~
acangiano
Some affiliates are phenomenal marketers. Frank Kern claims to have made 23.8
Million dollars with one of his product launches. In 24 hours.

~~~
bemmu
What impressed me was that this $50k/day was from a court document, so I
assume it to be true. With affiliates it's often difficult to know, since they
have an incentive to project success to boost e-book sales.

~~~
pbhjpbhj
>With affiliates it's often difficult to know, since they have an incentive to
project success to boost e-book sales.

If you're a successful affiliate I find it hard to imagine that you'd want to
write an e-book and even harder to imagine that you want to have more people
competing with you for affiliate money. So presumably the intention is to go
pyramid and get referral fees for those you subscribe in?

~~~
Psyonic
More money in selling dreams than products

------
ars
Why was Smoking Everywhere upset? They got around 1244*30 + 670 sales. Based
on their agreement of $45 per sale, that's about 1.7 million.

Isn't that what they want? Lots of sales?

~~~
WiseWeasel
That's how much they had to pay out to the affiliate network operator, in
return for successfully completed registration forms for a free trial Smoking
Everywhere was running. It's most likely that they had a limited amount of
resources to dedicate to the campaign.

~~~
ars
So why did they keep taking orders? Shut down their website if they don't want
orders. Or don't make a deal for $45 in the first place.

------
imechura
From reading the article it sounds like SE decided they did not want to pay
for services rendered then tried to hide behind an obviously modified contract
to limit cash outflow 20 < 200 referrals per day.

So I think the headline of this post is a little misleading.

Its is widely accepted that affiliate marketers can borderline on sleazy but
my experience with e-cigarette dealers makes them look like saints in
comparison.

------
yuhong
Of course, the solution is not to put stuff like that into the contract.

