Contracts as Private Law in Video Games and Immersive Entertainment

AuthorMichael Bombace, Brian D. Sites, Curtis A. Peele, Joshua A.T. Fairfield
Pages1-60
1
1
Contracts as Private
Law in Video Games
and Immersive
Entertainment
Michael Bombace
Brian D. Sites
Curtis A. Peele
Joshua A.T. Fairfield1
Takeaways
End-user license agreements (EULAs), terms of
service (TOS), and terms of use (TOU) are contractual
agreements between game players and the companies
that operate the games. These agreements can overlap
and have important differences.
1. Michael Bombace is counsel and director at Abaxx and
general counsel at Government Blockchain Association. Brian D.
Sites is assistant dean and associate professor at Barry University
School of Law. Curtis A. Peele is general counsel at CareerArc.
Joshua A.T. Fairfield is professor of law at Washington and Lee
University School of Law. For complete author biographies, see the
Contributors section of this book.
CONTRACTS AS PRIVATE LAW
2
Such agreements are highly customizable governing tools and are widely
used in regulating and protecting digital games and their content,
whether game operator or player generated.
These agreements are subject to the traditional limitations under
contract law, including unconscionability, modification, privity, and
limited enforcement against minors.
These agreements are favored by digital game operators in regulating
most online disputes and will continue to evolve as a result of judicial
and legislative developments in the digital games industry.
Introduction
“There are gods, and they are capricious, and [they] have way
more than ten commandments. Nobody knows how many because
everyone clicked past them.”2
Video game users are generally constrained in their actions by
the programming of the game. In the landscape of a digital world3
life is ubiquitously governed by contract law. Speech, conduct,
and existence—in fact, everything that a player does or says—is
constrained by a contract accepted prior to accessing the digital
2. Raph Koster, What Are the Lessons of MMORPGs Today?,
RAPH KOSTERS WEBSITE,
Feb. 24, 2006, http://www.raphkoster.com/2006/02/24/what-are-the-lessons-of
-mmorpgs-today; see also David P. Sheldon, Comment, Claiming Ownership, but
Getting Owned: Contractual Limitations on Asserting Property Interests in Virtual
Goods,
54 UCLA L. REV. 751,
751 (2007); Lydia Pallas Loren, Slaying the Leather-
Winged Demons in the Night: Reforming Copyright Owner Contracting with Clickwrap
Misuse, 30
OHIO N.U. L. REV. 495
, 497 (2004) (discussing the use of humor in a
website’s provisions for failure to register software downloaded through their web
pages and the threat of a leather-winged demon of the night seeking recourse).
3. For brevity, references herein may be made to “digital games,” “digital
worlds,” “video games,” and “virtual worlds” to broadly refer to all types of digital
games including the evolving space of virtual and augmented reality. The title
of this treatise and this specific chapter references “immersive worlds,” a term
to capture video games, virtual worlds, virtual reality, and augmented reality.
While they all differ in meaningful ways, they are equally governed by contracts.
Additionally, reference is made to players, users, and residents. These are used
interchangeably throughout this chapter and should be viewed under the same
umbrella when assessing legal obligations.
Introduction 3
game itself.4 Such contracts are commonplace today. Most com-
puter or smartphone users who have installed any software have
confronted an installation screen requiring them to agree to
specified terms of use as part of the software’s installation. These
agreements are often referred to as “end-user license agreements”
(EULAs), “terms of service” (TOS), or “terms of use” (TOU), along
with the privacy policy and other legal documents. These labels
are sometimes used interchangeably though the various types of
agreements often differ in practice.5 These contractual agreements
are the foundation of modern digital world governance. For exam-
ple, EULAs typically govern an intellectual property license trans-
action such as a software license. TOU or TOS generally govern a
broader set of issues including the software, use and access of a
website, mobile app, chat forum, and any other services related to
the user’s interaction with the game company.
This chapter addresses some of the most relevant legal issues
that all three types of agreements currently present. Where different
agreements raise distinct issues, they will generally be referenced
by their discrete names. Otherwise, this chapter relies on more
general wording by referring to them simply as “terms” or “TOU.”
4. See Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. Pa. 2007); Joshua
A.T. Fairfield, Anti-Social Contracts: The Contractual Governance of Virtual Worlds,
53
MCGILL L.J. 427
(2008). The question of contract-governed online communities
is increasingly important because community-governing contracts (end-user
license agreements (EULAs), codes of conduct, terms of service (TOS), or terms
of use (TOU)) have become the tool of choice for companies seeking to govern
multimillion-member online communities, from Facebook to YouTube to World
of Warcraft. Millions of people worldwide live significant parts of their lives in
communities governed by these contracts. The law of contract is the only law
consistently employed to govern these communities. See also Gerri L. Dreiling,
Online Gaming Runs Afoul of Click-Wrap Contract and Federal Law,
MO. LAW. WKLY.
,
Sept. 26, 2005 (“In order to play the game, the user must click through ‘I agree’
boxes on both an End User License Agreement (EULA) and Terms of Use (TOU).”);
Bettina M. Chin, Note, Regulating Your Second Life—Defamation in Virtual Worlds, 72
BROOK. L. REV.
1303, 1317–18 (2007) (“Before a user is allowed to access the services
that the web site provides, she must assent to the terms of the agreement.”) (citing
E.
ALLEN FARNSWORTH, FARNSWORTH ON CONTRACTS
§ 3.1 (2d ed. 1998)).
5. See, e.g., MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 937–42 (9th
Cir. 2010) (discussing distinctions between contract law and copyright law as they
pertained to Blizzard’s various contractual agreements with World of Warcraft
subscribers and a third-party software company).

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