When you purchase a product or service through NFT, you usually have a right of withdrawal. This means that you have the right to cancel the purchase within a certain period without giving any reason. The right of withdrawal usually applies to all types of sales contracts and gives you the opportunity to check whether the product or service is really as advertised.
What is an NFT?
A Non-Fungible Token (NFT) is a digital file that is verifiable and permanently stored via a blockchain. This makes an NFT different from other cryptocurrencies, whose tokens are not individual and can be easily exchanged. An NFT is therefore unique and not interchangeable. These features make NFTs attractive to buyers because they convey a sense of uniqueness. Therefore, they are very popular among both collectors and investors. Recently, there have been many prominent NFT purchases involving artwork, music pieces, and short films. Currently, Porsche also wants to offer an NFT collection. But what happens if you regret the purchase?
Right of withdrawal when purchasing an NFT
Buying NFTs is a relatively new phenomenon that is growing in popularity. The question therefore arises as to whether and how a right of withdrawal exists for such purchases. According to § 356 V BGB, there is basically a right of withdrawal when purchasing an NFT. However, there is an exception: if the NFT is delivered in digital form, the buyer cannot revoke the purchase contract if the seller has pointed out this circumstance. This means that once you receive the NFT, you have no right to a refund. However, it is possible for certain sellers to assure the buyer of a different arrangement, thus giving the buyer a right to cancel the purchase of the NFT. In this case, it is advisable to check exactly which conditions apply and how the general terms and conditions may be structured before concluding the contract. Furthermore, it should be noted that in Germany only consumers can make use of the right of withdrawal. This means that companies or investors are not entitled to repayment. However, the legal situation may be different in other countries, so companies or investors in other countries may have different rights. All in all, the legal situation and the rules surrounding the purchase of NFTs are still quite vague and unclear. It is therefore important to familiarize yourself with the legalities before you buy and make sure you know what you are doing and whether or not you are actually investing your money.
By the way, some readers will now have wondered why I wrote “when the NFT is delivered in digital form”. Blockchain is the prototype of digitalization, right? That is of course correct, but one point could certainly be discussed. If one considers that NFT is legally only a “storage possibility” for some right, then this right could be e.g. also the ownership of a real thing (in the sense of § 90 BGB) and thus the actual sale would not be a digital content and § 356 V BGB would NOT be applicable. This way of linking blockchain content with real-world content is becoming increasingly popular and could still present us lawyers with some challenges. Ask a specialist before you take risks as a company!
Today a short blog post, but about a more relevant legal problem, which raises some questions in the area of the design of purchase processes at NFT and the creation of GTC.