Judge in Phantomlord case rules clause in Twitch contract was unconscionable TwitchThe first crucial decision in the Phantomlord vs Twitch lawsuit was reached yesterday when Judge Karnow of the Superior Court of California ruled that the limited liability clause in James Varga\u2019s contract was unconscionable. Varga, who was removed from the Twitch platform for running a skins gambling casino where he seemingly rigged outcomes in his favour, has been embroiled in legal action against the streaming platform on the belief his ban was unfair. The first point of contention was a \u201climited liability clause\u201d in his contract, designed to limit how much he could have claimed in damages should a court rule in his favour. Twitch\u2019s contract included a $50,000 limit on any damages parties could claim from one another in the result of a lawsuit, a clause that is understood to be included in other contracts issued to streamers at that time. The judge\u2019s ruling now opens the door to Varga being able to make a claim for damages in excess in $50,000 although this ruling in no way passes judgment on the validity of such a case. In contract law, unconscionability is a term used to describe a situation surrounding an agreement that is unjust or overwhelmingly one-sided, in favour of a party that has superior bargaining power, such that entering into the agreement would be contrary to good conscience to the party negatively affected. 700Following a three day hearing in August that included live testimony, presentation of evidence and analysis of depositions, the court was given the task to go over each of the arguments presented by Varga\u2019s legal counsel. The judge concluded that there was indeed some procedural unconscionability on the basis of \u201coppression\u201d when it came to contract negotiations. \u201cVarga had some college education, had been in contractual relationships before, such as with Own3d and others\u201d the court document reads, \u201cbut as I note below there was a significant disparity in legal sophistication and Varga did not use an attorney. These factors on balance suggest some oppression.\u201d The judge also observed that some procedural unconscionability was present due to Varga not understanding the significance of his bargaining power at the time of negotiations. When it came to the matter of substantive unconscionability, meaning the terms of the contract are objectively unfair as presented, the judge ruled that the clause alone was so one-sidedly in favour of Twitch that he couldn\u2019t view it any other way. \u201cVarga\u2019s monthly income averaged over $5,000 per month and appeared to cluster around $10,000 per month\u2026 so the $50,000 cap is incommensurate as to be unconscionable\u201d Judge Karnow wrote. The judge also added in their conclusions \u201cthere is no reason to limit Varga to $50,000 when he might be entitled to a much, much higher sum\u2026 From a practical point of view, which I think is essential consideration, limiting recovery to $50,000 virtually kills off the odds of a suit against Twitch at all. The agreement doesn\u2019t appear to have an attorney fees clause and few \u2013 if any \u2013 lawyers would take on a contingency case against Twitch for some reasonable percentage of $50,000. The cap is unconscionable.\u201d Several other of Varga\u2019s arguments were shot down by the judge, including one where he claimed to have not read the contract, that was sent to him electronically via Hellosign, because he didn\u2019t know he could scroll down through the pages. \u201cI think if you hit the scroll wheel, it might work\u201d Varga said during a deposition \u201cbut there was a big button for me to \u2018sign here,\u2019 \u2018continue\u2019 and that\u2019s what\u2019s like in different colours. So I clicked that as thinking that\u2019s what I had to do.\u201d \u201cSo you just had to do that\u201d came the follow-up question. \u201cYou couldn\u2019t scroll around and take a look at the agreement?\u201d \u201cAgain, I didn\u2019t know if that\u2019s what needed to be done\u201d Varga responded. The judge decided this explanation was insufficient to explain why Varga had not read the contract. \u201cI find the suggestion, if that is what it is, incredible\u201d they said. \u201cVarga, who spent virtually all his waking hours on computers and was familiar with a variety of programs knew he could scroll through the agreement\u2026 He simply chose not to do so.\u201d While the ruling of unconscionability will come as a blow to Twitch in this case, it was also expressly stated that this ruling does not affect claims for intentional misrepresentation, negligent misrepresentation or section 17200 of the Business and Professions Code, which refers to unlawful, unfair or fraudulent business acts. These are all components of Twitch\u2019s counter-filing against Varga. There will now be a case management conference to discuss what happens next in this landmark case.<\/p>\n","protected":false},"excerpt":{"rendered":"
Judge in Phantomlord case rules clause in Twitch contract was unconscionable TwitchThe first crucial decision in the Phantomlord vs Twitch lawsuit was reached yesterday when Judge Karnow of the Superior Court of California ruled that the limited liability clause in James Varga\u2019s contract was unconscionable. Varga, who was removed from the Twitch platform for running […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-52413","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/posts\/52413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/comments?post=52413"}],"version-history":[{"count":0,"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/posts\/52413\/revisions"}],"wp:attachment":[{"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/media?parent=52413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/categories?post=52413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dejan.au\/index.php\/wp-json\/wp\/v2\/tags?post=52413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}