A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 35
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Within a natural language contract: it is likely that any provisions relating
to resale royalties should be contained within a separate natural language
document, to ensure the effectiveness of the obligation.
It should be noted that the ERC-721 standard does not provide for this
automatically, so artists will need to consider the addition of this right, or the
creation of a bespoke smart contract.
Litigation &
Contentious issues
Given the numerous uncertainties detailed above in relation to
the legal issues surrounding NFTs as an emerging technology, it is
perhaps inevitable that contention will spring up.
Indeed, in some respects litigation will assist in strengthening case law, and
therefore certainty, around the application of legal principles.
Misrepresentation
It is often the case that contention around NFTs focuses on conflict
and misunderstanding over the rights and assets being either sold
or acquired, which could lead to claims for breach of contract, or
misrepresentation.
It is therefore crucial that all parties to any transfer or other transaction involving
NFTs are completely clear on what rights are being acquired by the buyer and
what rights will remain with the seller.
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