A Florida judge ruled in favor of the digital artist Danny Casale in a breach of contract suit brought by the web3 collective DigiART, which claimed that the two had a year-long profit-sharing agreement on initial drops of Casale’s NFT projects.
The case hinged on a simple but glaring omission from the contract between Casale and DigiART: there was no start date.
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According to the suit, DigiART claims Casale gave the company exclusive rights to market and sell any NFTs the artist made between May 2021 and May 2, 2022. In exchange for DigiART’s marketing prowess, Casale would split the net profits of his NFTs evenly with the company. Secondary-market royalties would go straight in Casale’s pocket.
In the judgement, Judge Wendy Berger outlined a blow-by-blow account the events that led to the lawsuit and the reason for her decision. Marcel Katz, who since January 2021 had worked as Casale’s “east coast representative” for his physical artworks via his company Art Plug, asked Casale if the artist would like to form a second partnership, one strictly based on the sale of NFTs called DigiART. Casale agreed to that proposal.
After the two had come to terms about splitting profits and secondary sales, a DigiART representative emailed Casale a draft agreement. While there were details in the body of the email regarding the profit-sharing structure, it had no start date. Casale signed the agreement on April 30, 2021, with the start date still blank.
A few days later, Katz shared the contract, now with the effective start date filled in as May 2, 2021, while Casale waited 10 months for his countersigned copy of the agreement.
In March 2021, three months before the agreement with DigiART, Casale launched the NFT project that would become Coolman’s Universe (after Casale’s Instagram handle, Coolman Coffeedan). According to the complaint filed by DigiART, Katz, under the Casale/DigiART agreement, worked to promote Casale and his work, most prominently with a pop-up in Miami’s design district during Miami Art Week that sold “the world’s most expensive cup of coffee, at $1,000 per paper cup, with each cup featuring a one-of-a-kind original artwork by Casale.”
Coolman’s Universe was comprised of 10,000 NFTs worth more than ETH 18,000 ($50 million) on online trading platform OpenSea. Regardless of the project’s start date, DigitART’s complaint alleged that the project meant Casale was “in breach of his obligations” to the company and ignoring his “contractual obligations” because the sales took place after the agreement had been signed.
Casale said that neither Katz nor DigiART let him know that he’d breached their agreement, despite knowledge of Coolman’s Universe, and according to the ruling, “DigiART admits that it did not inform [Casale] that his release would be a violation of any agreement until months after it became aware of the Coolman NFT Project.”
In the end, DigiART’s claims that “Casale fraudulently induced DigiART to expend its time, money, and energy building his brand [and] promoting his work” and that Casale has profited “to the tune of millions of dollars, which he has refused to share with DigiART [as stipulated by their agreement” didn’t matter.
Berger’s decision to in favor of Casale’s motion for summary judgment and dismiss the case against him was summed up neatly in her ruling: “As a general rule, presence of blanks in a contract is fatal to the enforcement.”
Neither DigiART nor their attorneys responded to a request for comment.
Source: artnews.com