Earlier this week, Porsche minted its first major NFT collection, which was notable for two reasons. First, the absence of demand caused the automobile company to stop issuing the Royal Mint [at the price of . 911 eth ($1500)], reducing the offer of the 7500 nft offered to 2363 nft. The price on OPENSEA is now much higher than the price of mint. The other novelty was a clear declaration on the right of the buyer to be refunded, a subject we will explore here.
EU right to refund
European law has a fairly well-known requirement that there’s a 14 day cooling off period for online and mail order purchases, allowing consumers to return items for no reason.
Accordingly, Porsche has explicitly included such wording at the checkpoint. And the more detailed terms also imply a refund of blockchain gas fees.
However, there is always a time difference between accepting the purchase of a new nft and the nft being hit. When the user agrees to go ahead with the Mint, there is another Porsche wording indicating that the right to a refund is no longer applicable.
How are you holding up?
The chill in legislation (which the United Kingdom also implemented before Brexit) does not cover everything. Such as excluding consumables and custom items. You can't order food online, eat it and demand money just because you want to. This is also true for other consumables such as flights, hotels, concerts and video broadcasting.
Similarly, you may not return custom items such as a custom costume. Porsche NFT features a selection of basic designs with user-selected customizations. Therefore the customisation classification is probably applicable. And personalization begins only as soon as the keystroke begins.
What happens if the wording of the rebate is not included?
We've had a ton of warnings, so what about all these warnings that didn't include the language? There’s a clause in the EU legislation stating an omission to inform the consumer of a withdrawal right extends the refund period to a year.
Since the NFT market was much healthier one year ago, this may be an issue for some NFT issuers.
But it is not clear that the Repayment Act is applicable to NFT. According to the design of the nft, there are at least three possible exceptions: whether the nft involves consumables, whether it is customizable (not randomized), and the digital content exception.
In some cases, participation in events is an obvious exception. However, is there a reimbursement entitlement before the event occurs?
While many NFT include random characteristics, this is not the same as something created at the consumer specification, as with the nfts porsche.
The legislation includes a specific exception for digital assets which imply performance when performance has begun. This is clearly intended to include streaming video, but could cover ETFs with specific functionalities.
By the way, when goods and services are sold by an individual, not in the course of a trade, there is no right of withdrawal. Therefore, reselling NFT often constitutes an obvious exception.
Web3 is proving to be fertile ground for lawyers, and this is another area that is subject to litigation.
Hat tip to Oliver Scherenberg’s LinkedIn post