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>There is nothing to interpret. Those who invested in that smart contract invested in it as written, and failed to have it properly vetted. What about the plai

>There is nothing to interpret. Those who invested in that smart contract invested in it as written, and failed to have it properly vetted. What about the plain language of the marketing materials soliciting investment that was completely inconsistent with the code of the DAO. It happens all the time in the world outside of smart contracts, where people rely on marketing materials (say marketing a car loan for 4%, but the contract provides for a substantially higher interest rate). You can make the same argument in those cases, that the individual should have read an understood the actual contract and not relied on the marketing material, in fact, the marketing material might even include a disclaimer, but that doesn't change the fact that the individual is likely to prevail in a court of law based on causes of action including, but not limited to: fraud, fraud in the inducement, unfair trade practices, unjust enrichment, breach of contract, etc... What makes smart contracts so special that people can falsely market them to the public and not be liable?

jessaustin 10y ago
Do you contend here that the "hackers" and the "marketers" are the same people? If that could be demonstrated, it would be an extraordinary revelation!
- will_brown 10y ago
  It is possible, but of course I don't know and it does not matter. Let's say I induce you into a contract based on fraud, (you give me $x to invest in opportunity Y), now the contact actually says any of the investors have access to the funds and can take them before they are invested in Y. Another investor takes all the money, legally you would be able to come after me and the investor who took the money, maybe under different theories, just as examples, you might go after me for fraud and breach of contract while you go after the investor who actually has your money for unjust enrichment.
  - EdHominem 10y ago
    If the other investor wasn't an insider you wouldn't have a case against them. There's nothing unjust, you have the same rights under the contract as they do, they didn't use insider knowledge, etc.
    - will_brown 10y ago
      >If the other investor wasn't an insider you wouldn't have a case against them. There's nothing unjust... 3rd party beneficiaries of contracts get sued all the time. Just to put it into perspective, you and I enter a contract where you give me $x to invest in Y, instead of investing in Y, I just give the money to a 3rd party who may not even be mentioned in the contract, the law would most certainly allow you to go after both the third party and myself. Unjust enrichment is a legal term or art and a cause of action, not your or my definition of unjust. Here are the elements of unjust enrichment: (1) a benefit conferred upon a defendant by the plaintiff, (2) the defendant’s appreciation of the benefit, and (3) the defendant’s acceptance and retention of the benefit under circumstances that make it inequitable for the defendant to retain it without paying the value of the benefit. In other words when the 3rd party assumes your investment funds, all elements would be satisfied, whether or not they are a party to the contract.
      - EdHominem 10y ago
        That's because, presumably, the contract didn't say "The first shareholder owns it all." > under circumstances that make it inequitable [...] But if that's what the contract clearly said, where would the injustice be? In lotteries one person walks away with all the money so that alone isn't enough.
EdHominem 10y ago
"The code is law" - Slock.it Said in plain english, in the same privileged voice that discussed their intentions. They were careful to state that if the code and their wishes/statements disagreed, that the code was the authoritative answer. The Technological-Savvy-Investor (you called them a hacker) was induced to play a code-based Nomic for real money but was then cheated out of their prize by the conniving and dishonest administrators.
- will_brown 10y ago
  >The Technological-Savvy-Investor (you called them a hacker) Why put words in my mouth? >They were careful to state that if the code and their wishes/statements disagreed, that the code was the authoritative answer. It what other area of contract law are people allow to solicit investment based on false representations/marketing and hide from liability based on a disclaimer that the marketing materials may be inconsistent with the contract? I appreciate that they had the foresight to realize their code was likely to execute in unexpected ways or at least ways inconsistent with their marketing/solicitation and they made those disclaimers, but it isn't novel in law where contracts are inconsistent with marketing material (which even disclose the potential inconsistency).
  - jude- 10y ago
    What was false and misleading? Didn't the DAO creators and enthusiasts insist up and down that the code is the irrefutable interpretation of the contract? Doesn't ethereum.org still state that smart contracts are "applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference"? The only false representations I've seen have been from the Ethereum developers: by hard-forking to change the terms of the DAO, they have misrepresented Ethereum to everyone who invested in its ICO. EDIT: I'm more interested to know whether or not the DAO "attack vector" was placed there intentionally. Then you might be able to argue that the developers acted in bad faith.
    - will_brown 10y ago
      >Didn't the DAO creators and enthusiasts insist up and down that the code is the irrefutable interpretation of the contract? Yes, but again this is not unique to the DAO. Moreover, it occurs all the time that marketing materials are put out with disclaimers that the marketing material is just that marketing material and that any inconsistencies between the marketing material and the contract, the contract prevails. It doesn't always make it so and there is good public policy reason why. My analogies are always kind of shot down as it relates to the DAO, but I think they help flush out the legal reasoning. How about valeting your car, obviously there is an implied contract that you will pay the fee and get your car back (maybe even a verbal representation, "just bring the stub back and we will pull your car around") but what if the stub includes language (as they do) that you agree the valet will not be responsible for stolen property and then they don't bring your car back. Who knows who took your car? Maybe the valet, maybe the valet gave the keys to someone else, maybe someone legit broke in and stole your car without the valet being aware... even though you agreed to the contract/terms of the valet ticket it does not become a contractual right for valet to take your car, they could still be liable (potentially criminally in addition to civilly). Moreover, representations remain false even with disclaimers acknowledging the representation may be false.
grandalf 10y ago
> What makes smart contracts so special that people can falsely market them to the public and not be liable? This is indeed an interesting question. I think the obvious answer is nothing... Nothing makes them different. Unless they are executed in a way that makes traditional enforcement methods useless. Which jurisdiction will legal enforcement occur in? Who has the ability to reverse the outcome of the contract? This is both the horror and the beauty of decentralized smart contracts.
pigeons 10y ago
> What about the plain language of the marketing materials soliciting investment that was completely inconsistent with the code of the DAO. The plain language marketing was that "the code is law". This was repeated many times in many ways and with cute little gifs, but most explicitly https://web.archive.org/web/20160704190119/https://daohub.org/explainer.html https://web.archive.org/web/20160704190119/https://daohub.or... "Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO’s code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO’s code controls and sets forth all terms of The DAO Creation. " > What makes smart contracts so special that people can falsely market them to the public and not be liable? This is a separate question that should be addressed.

jessaustin 10y ago

Do you contend here that the "hackers" and the "marketers" are the same people? If that could be demonstrated, it would be an extraordinary revelation!

will_brown 10y ago
It is possible, but of course I don't know and it does not matter. Let's say I induce you into a contract based on fraud, (you give me $x to invest in opportunity Y), now the contact actually says any of the investors have access to the funds and can take them before they are invested in Y. Another investor takes all the money, legally you would be able to come after me and the investor who took the money, maybe under different theories, just as examples, you might go after me for fraud and breach of contract while you go after the investor who actually has your money for unjust enrichment.
- EdHominem 10y ago
  If the other investor wasn't an insider you wouldn't have a case against them. There's nothing unjust, you have the same rights under the contract as they do, they didn't use insider knowledge, etc.
  - will_brown 10y ago
    >If the other investor wasn't an insider you wouldn't have a case against them. There's nothing unjust... 3rd party beneficiaries of contracts get sued all the time. Just to put it into perspective, you and I enter a contract where you give me $x to invest in Y, instead of investing in Y, I just give the money to a 3rd party who may not even be mentioned in the contract, the law would most certainly allow you to go after both the third party and myself. Unjust enrichment is a legal term or art and a cause of action, not your or my definition of unjust. Here are the elements of unjust enrichment: (1) a benefit conferred upon a defendant by the plaintiff, (2) the defendant’s appreciation of the benefit, and (3) the defendant’s acceptance and retention of the benefit under circumstances that make it inequitable for the defendant to retain it without paying the value of the benefit. In other words when the 3rd party assumes your investment funds, all elements would be satisfied, whether or not they are a party to the contract.
    - EdHominem 10y ago
      That's because, presumably, the contract didn't say "The first shareholder owns it all." > under circumstances that make it inequitable [...] But if that's what the contract clearly said, where would the injustice be? In lotteries one person walks away with all the money so that alone isn't enough.

EdHominem 10y ago

"The code is law" - Slock.it Said in plain english, in the same privileged voice that discussed their intentions. They were careful to state that if the code and their wishes/statements disagreed, that the code was the authoritative answer. The Technological-Savvy-Investor (you called them a hacker) was induced to play a code-based Nomic for real money but was then cheated out of their prize by the conniving and dishonest administrators.

will_brown 10y ago
>The Technological-Savvy-Investor (you called them a hacker) Why put words in my mouth? >They were careful to state that if the code and their wishes/statements disagreed, that the code was the authoritative answer. It what other area of contract law are people allow to solicit investment based on false representations/marketing and hide from liability based on a disclaimer that the marketing materials may be inconsistent with the contract? I appreciate that they had the foresight to realize their code was likely to execute in unexpected ways or at least ways inconsistent with their marketing/solicitation and they made those disclaimers, but it isn't novel in law where contracts are inconsistent with marketing material (which even disclose the potential inconsistency).
- jude- 10y ago
  What was false and misleading? Didn't the DAO creators and enthusiasts insist up and down that the code is the irrefutable interpretation of the contract? Doesn't ethereum.org still state that smart contracts are "applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference"? The only false representations I've seen have been from the Ethereum developers: by hard-forking to change the terms of the DAO, they have misrepresented Ethereum to everyone who invested in its ICO. EDIT: I'm more interested to know whether or not the DAO "attack vector" was placed there intentionally. Then you might be able to argue that the developers acted in bad faith.
  - will_brown 10y ago
    >Didn't the DAO creators and enthusiasts insist up and down that the code is the irrefutable interpretation of the contract? Yes, but again this is not unique to the DAO. Moreover, it occurs all the time that marketing materials are put out with disclaimers that the marketing material is just that marketing material and that any inconsistencies between the marketing material and the contract, the contract prevails. It doesn't always make it so and there is good public policy reason why. My analogies are always kind of shot down as it relates to the DAO, but I think they help flush out the legal reasoning. How about valeting your car, obviously there is an implied contract that you will pay the fee and get your car back (maybe even a verbal representation, "just bring the stub back and we will pull your car around") but what if the stub includes language (as they do) that you agree the valet will not be responsible for stolen property and then they don't bring your car back. Who knows who took your car? Maybe the valet, maybe the valet gave the keys to someone else, maybe someone legit broke in and stole your car without the valet being aware... even though you agreed to the contract/terms of the valet ticket it does not become a contractual right for valet to take your car, they could still be liable (potentially criminally in addition to civilly). Moreover, representations remain false even with disclaimers acknowledging the representation may be false.

grandalf 10y ago

> What makes smart contracts so special that people can falsely market them to the public and not be liable? This is indeed an interesting question. I think the obvious answer is nothing... Nothing makes them different. Unless they are executed in a way that makes traditional enforcement methods useless. Which jurisdiction will legal enforcement occur in? Who has the ability to reverse the outcome of the contract? This is both the horror and the beauty of decentralized smart contracts.

pigeons 10y ago

> What about the plain language of the marketing materials soliciting investment that was completely inconsistent with the code of the DAO. The plain language marketing was that "the code is law". This was repeated many times in many ways and with cute little gifs, but most explicitly https://web.archive.org/web/20160704190119/https://daohub.org/explainer.html https://web.archive.org/web/20160704190119/https://daohub.or... "Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO’s code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO’s code controls and sets forth all terms of The DAO Creation. " > What makes smart contracts so special that people can falsely market them to the public and not be liable? This is a separate question that should be addressed.