In one of the first court cases of its kind, a backer of the ZX Spectrum Vega Plus has won a refund from Retro Computers Ltd, after Luton County Court decided that Indiegogo's small print didn't overrule the customer's right to expect delivery of a product.
As spotted first by the Register District Judge Clark ruled that, by backing the crowdfunding campaign at the required level to receive the retro system as a backer perk, "a direct contract of sale" had been formed between backer Rob Morton and RCL, the company producing the system. Morton was awarded £584, to cover his £85 pledge, £5 postage, plus travel and loss of earnings for himself and his two court witnesses.
There are some extremely curious aspects to this case. Dr David Levy, chairman of RCL, failed to attend the hearing. He represented himself in court, but ultimately did so primarily via witness statement. Levy claimed he was too scared to attend because he was worried about "having his cock chopped off" by online harassers. Levy also sent Morton £155 the night before the court case hoping to avoid proceedings, which the court felt was "not appropriate."
The words of District Judge Clark:
That document is important in my view for this reason: it says 'this order'. Not 'this pledge' but 'this order' has been successfully added to your campaign. That would appear to be something that was probably in my view provided by Indiegogo but there’s no clarification of that. It makes it clear, 'this is an order'. This was successfully added to your campaign. This is the information that was provided to the claimant at the time.
As far as the defence of the defendant is concerned, at no stage do they deny there was effectively an agreement to provide the Vega Plus. Their defense is very much on the basis of, 'we’re going to produce it, he’s going to get it, it’s just a bit late'. There was an estimated delivery date of September 2016.
It says: "campaign owners are legally bound to perform on any promise to contributors, including delivering any perks." The defendant says [the ZX Spectrum Vega Plus system] was a perk. As far as the paperwork in relation to this transaction is concerned, the claimant produced documentation that was sent to him before he entered into the agreement to provide funding [...] It talks about the benefits of supporting, pledging £100 to receive a Vega Plus from the first production run. On that basis it would imply if you promised to pay £100 you would get a Vega Plus from the production run.
So as far as Judge Clarke is concerned, Indiegogo backers were told when they backed the ZX Spectrum Vega Plus that it was an order, as opposed to a pledge, and thus an expectation of receiving the item was fair. The judge ultimately is ruling that the product was promised in exchange for money, and the product was not delivered, so a refund was applicable – as it would be with any other more standard or direct purchase.
This ruling is important, as it now provides case law that can be pointed to in the UK for those who back crowdfunding campaigns and fail to receive the products promised. It also demonstrates, yet again, that the multi-page small print so familiar to the online age and digital goods is rarely legally binding. This judgement says that transactions of this sort – you give me £100, I'll deliver you a given object in 12 months – amount to a direct contract of sale. Which will certainly be useful if anyone else out there is looking for refunds on this kind of thing.