Caveat emptor, Latin for “Let the buyer beware” (from caveat, “may he beware”, the subjunctive of cavere, “to beware” + emptor, “buyer”). Generally, caveat emptor is a principle of contract law that controls the sale of real property after the date of closing, but may, and often does, also apply to sales of other goods. The phrase caveat emptor arises from the fact that buyers often have less information about the good or service, or for that matter, the trader they are dealing with, when they are purchasing, while the seller, or trader, has more information.
What is the status of a purchase, at least under common law? Well, the answer is quite clear, across the various jurisdictions, the courts have decided that terms of the various Sale of Goods Acts will apply to purchases. These acts serve to give clear definitions of the responsibilities and duties of a buyer, and the seller, during. and following, a sale. Now for a sale to take place there must be:
An Offer and an acceptance:
- An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed.
- Acceptance: A promise or act on the part of an offeree indicating a willingness to be bound by the terms and conditions contained in an offer.
- Consideration is the concept of legal value. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and more.
An intention to create a legal relationship:
- Uses an “objective test” asking whether the reasonable bystander, after taking into account all the circumstances of the case, thinks that the parties intended to be bound.
Now, the above is merely an introduction to the concepts of contract law, and legal definitions, like the law itself, will differ across jurisdictions. However, the various Sale of Goods Acts, predate the twentieth century and have evolved over the intervening years. How does this affect Cryptocurrency purchases? Well let me begin by pointing out that when the UK Sale of Goods Act of 1893, was signed into Law in February 1894, there was no such thing as a credit card, Yet the law evolved to take account of credit card purchases. When the internet arrived, and we began to shop on eBay and its ilk, the law evolved to cover these transactions. We now purchase with bitcoins, Quark, Litecoins, et al. Do we enjoy the benefits of consumer protection or are we simply at the mercy of Caveat Emptor? Clearly in the guideline definitions I have given above, we should enjoy full protection. Bitcoin fulfills the need for consideration and any court would accept “the intention to create a legal relationship”was present. Can we turn to the courts to have our contracts of sale enforced? Can we have restitution, and if we can, what form will it take?
The reason I am writing this piece is that I recently contracted to purchase two items from two companies that accept bitcoins. On May 3rd, I sent .76 BTC to Coinabul for two gold coins, They took the order and allocated me an order no., 100001433, After a while, several days, I noted that the order was still showing as “processing”, so I sent an eMail and after another few days I received a response. They informed me that it took up to 17 working days to process my order. This did not reassure me. Today, June 6th, my order is still showing as processing. They are not answering the phone, they have not replied to email. I am now quite concerned as 17 working days have well passed. Perhaps, someone’s grandmother died, that can happen, my own died on six occasions in the last ten years. Often happens on or around sunny bank Holidays…
I would, however, want to see some return from Coinabul, and very shortly.
I ordered some more coins from another company, Agora Commodities, at the end of May. There was a small glitch in the order and one of my two Bitcoin transfers didn’t go through. Joseph, from Agora, was in touch and the problem was sorted. The whole experience was very professional and my purchases are winging their way through the mail, at least to the best of my knowledge. My purchase number was 7060. I will deal with Agora Commodities again. I have not received any form of payment from Agora for expressing my satisfaction, I will not receive anything in the future other than the coins I have paid for. I am not expecting to be rewarded by Coinabul either.
That is a problem for me. I use bitcoins but it is my belief that I should enjoy the same customer service whether I shop with cash, credit or crypto. If we get good service we must promote it. If the service is bad we should promote it as well. In a currency based on mutual distrust, we should at least share our experiences. Caveat Emptor will not suffice.