Blockchain Contract Drafting During Sale of Utility Tokens

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Legal Agreements for Website

A blockchain website or a mobile application requires appropriate terms of use and legal disclaimers. When you are considering legal disclaimer for website content you need to be careful about how you word things. If you try to use legal jargon or contractions in your disclaimers then you are more than likely going to get into trouble. For example, you may state in your disclaimer “We do not guarantee that our web pages or content will be error free”. In doing this you are inadvertently setting yourself up for a lawsuit as if the content were libelous or slanderous and you may find yourself and/or your company in hot water. Yes, there is a free site privacy disclaimer template for blogs or online pages, and yes you can certainly use such a template for your own blog, but those could not cover all of your local laws.

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Internet law is extremely complex and the fact that you never know what or who you are dealing with on the internet, the last thing you need is to find yourself and/or your business in legal hot water, be it an online eCommerce store or a blockchain business for issuing utility tokens via Initial Coin Offering or an ICO. Therefore, to ensure that you and/or your business will not find yourself in a tricky situation and open yourself up for a multitude of possible lawsuits, it is best to consult with an internet lawyer who specializes in website content or Internet Law.

Drafting Legal Disclaimers

On any website, a warranty disclaimer is a verbal or written testimony demonstrating that the vendor is not limited by any warranty safeguards for the end product. This can be published after a warranty has been disclosed, to rescind the last warranty, or it can be published before a warranty is incorporated with the end product. Either way, the disclaimer helps to release the vendor or founder from legal harm for end product faults or defects. This is especially important for Token Sales and exchanges as any Initial Coin Offering function in the digital spectrum and the assets owned and exchanged are not physically handed over to the buyer. In professional or creative employments, implied warranty matters also occur for disagreements originating from a difference of opinion on whether the deliverables match expectations.

Disclaimer of Warranties

To prevent users from seeking legal action, organizations favor a general disclaimer that strives to vacate any manufacturer obligations for the end product. If these disclaimers allowed organizations to evade liability that effortlessly, there would be little incentive for them to furnish solid outputs. As long as a derivative is utilized relatively, the law ensures safety for the user. Thus, in general, what a warranty does is to provide a guarantee by the seller of an output that it is provided as represented. It can be an express warranty, which occurs from the vendor, or an implied warranty, which occurs by law. Popular warranties include:

The Implied Warranty of Merchantability – A warranty to the user that the output fulfils conventional standards of care and that they are of the same standard grade, integrity, and price as similar goods

The Implied Warranty for a specific Purpose – An assurance to the user that the output is fit for the special, non-ordinary goal, for which it is to be employed, and,

The Warranty of Non-Infringement – An assurance by a vendor who frequently trades in a specific type of property that the creation does not violate the intellectual property rights of any other individual.

Displaying a Product Disclaimer

Since a Warranty or a Disclaimer specifically is meant to diminish the liability of the vendor or the creator, the same should always be accessible to the user. When incorporating a disclaimer to their websites for their ICO currencies, companies must ensure that the same is in clear view of the user, difficult to remove, and long-lasting. Since an asset may be resold in its lifetime, the disclaimer must be reliable enough to last shifts in ownership.

Drafting of Online Agreements

Most firms performing electronic exchanges have little difficulty in accomplishing the requirements to develop enforceable, legally binding warranties on the internet. One region that merits attention, still, is the problem of warranties. Any agreement for the sale of assets or goods contains implied warranties. A vendor implicitly guarantees that the assets it proposes for exchange are competent for which they are generally employed. Vendors can furthermore draft explicit warranties by rendering a specific description of the distinct terms. It is also reasonable for a vendor to formulate explicit warranties, often unintentionally, by rendering general terms in brochures or other publicity materials about product performance for a specific task.

Advocate Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology, Intellectual Property & Corporate Laws. He is reachable at rd (at) patentbusinesslawyer (dot) com & @rdpatentlawyer on Twitter.

Quoted in and contributed to 50+ national & international publications (Bloomberg, FirstPost, SwissInfo, Outlook Money, Yahoo News, Times of India, Economic Times, Business Standard, Quartz, Global Legal Post, International Bar Association, LawAsia, BioSpectrum Asia, Digital News Asia, e27, Leaders Speak, Entrepreneur India, VCCircle, AutoTech).

Regularly invited to speak at international & national platforms (conferences, TV channels, seminars, corporate trainings, government workshops) on technology, patents, business strategy, legal developments, leadership & management.