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Comment by ajb | Hacker News Reader

"... it has some special logic to detect when anyone other than the specified owner is transacting it, and in these situations it only returns 10% of the specified amount - despite emitting event logs which match a trade of the full amount"

Wouldn't be surprised if this comes under the definition of fraud.

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Why? The contract is public, anyone trading this token can read it. This seems like "don't trade tokens you haven't audited".

Just because something is publicly documented doesn't make it legal. I can't put "our price says $5 but actually we will charge you $5,000" into terms onto a website and expect to get away with it. The only difference is there is no actual enforceability of anything on the blockchain outside of smart contract code itself.

This guy put up a sign that says "If you give me $100 I'll give you $10 back with an extra 0 handwritten on the bill", and people gave him $100.

Put another way: I can't claim fraud just because I didn't understand/read/validate the contract language.

"I can't claim fraud just because I didn't understand/read/validate the contract language." is absolutely not true.

If you create a contract with intent to mislead people and having them sign it with the expectation that they won't understand/read/validate the contract language, then the other party definitely can claim fraud afterwards and (depending on the circumstances and evidence) may win such a claim. Contract law is about intent above all, the actual contract language clarifies and documents that intent, but in circumstances where the contract language and intent clearly diverge, any adjudication must and will take intent into account.

To be specific, "intent to deceive" is a key part of the limitations in contract law in pretty much every jurisdiction. Fraudulent misrepresentation, which explicitly includes withholding information as well, can invalidate the whole contract if you (for example) tricked someone into signing it i.e. 'fraud in inducement' and in such cases the harmed party definitely can claim fraud even if the contract language explicitly said that they will lose their money, if the other party mislead them into thinking otherwise.

> If you create a contract with intent to mislead people

The guy didn't intend to mislead. He didn't even advertise the thing besides publishing it on the blockchain. People bought it from him without auditing it. I sincerely hope this would be a difficult fraud case to make.

The part of contract law you're citing is used to prevent e.g. predatory lending. I understand that it exists and what the precedent means, and I disagree that this is the same thing.

Because law isn't code, although it might look like it. The law is interpreted by human beings, aka judges, who might decide that this is an attempt to deceive, even though the deception is hiding in plain sight.

But I'm not a lawyer, so I'd be interested on informed takes on that.

Actually this contract is not public, its source was not published on etherscan. You can read its opcodes and try to run it through a decompiler, but you can't get its original source.

That shouldn't really matter though. The contract was not advertised to the public, he could argue it was a private contract that could only be used by whitelisted addresses. Sandwich bots made the mistake of trying to interact with a random contract and assuming that it follows a particular kind of behaviour.

How can it be fraud, when you can read the contract? It's a clear if/then statement.

this is what people unironically believe should replace our current legal system

To be fair, 250k legal correction isn’t that high relative to fighting nuances in conditionals and terms for 5 years in a more human court.

250k was one one programmer made in an experiment over a couple nights.

The Ethereum world (and potentially other cryptos) seem awash with this kind of thing.

Just because Facebook puts things in their T's & C's doesn't mean they get away with it.

That said, crypto is intentionally the wild west, because the Big Banks are bad. Libertarian economics, no oversight, no fraud protection, but freedom. Whether you want that is another matter. Personally I think it's a really really bad idea, and billions of monies have been lost, generated, stolen, etc because of it.

It's possible to commit fraud while being entirely open and forthright. The key is whether it can be argued that there was an intent to deceive, despite being forthright.

A famous example would be the Toy Yoda/Toyota fraud:

https://apnews.com/article/6f88d96871f3292f506e2679cf012597

the case was settled. there was no verdict of fraud, just the allegation based on the suit filed.

https://www.morelaw.com/verdicts/case.asp?s=FL&d=19243

That's different. The manager made an ambiguous oral statement, and in contract law ambiguity is resolved in favor of the party with less power or who didn't make the ambiguous statement.

Exactly. Wouldn't be surprised if this became a common type of scam on Uniswap.

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