Legal Lesson - How International Contracts are Enforced

Hello again!

Since I got quite a few questions from my last post, which was made in relation to general information about what contracts are and how they work for Roblox developers, I decided I wanted to discuss an equally as ill-informed area of the legal aspect behind hiring developers - international contracts.

The Problem

For so many developers on this humongous platform, almost all of us have run into one common problem, and that problem is:

  1. entering into a contract with your developer/s (or your employer/s);
  2. the other party not honouring their end of the bargain; and
  3. you coming to the realization that there was nothing you could do about it but perhaps create awareness for the problem on social media.

I’ve been a 3D animator on Roblox, offering my commissions for years, and time and time again I have unfortunately found myself getting scammed or ripped off by deceitful or lazy developers and employers. Before studying law, I had no clue what to do to get the money I was owed from deceptive clients, and that’s primarily because they’ve always been in other countries.

It really is a shame that there are so many people who think they can get away with scamming hard working developers of their hard-earned money, so today I intend to tell you all that there is one huge problem with their schemes. The escapades of these people generally rely on 2 very big assumptions:

  1. People assume that if a developer is under 18 years of age, then they cannot be bound to a legal agreement - THIS IS FALSE
  2. People assume that if someone they enter into an agreement with is in another country, then they won’t be able to force each-other to hold up their respective ends of the agreement - THIS IS ALSO FALSE

I know many of you guys out there know how the experience of getting scammed for your development services feels, so today I’d like to give you all some information about international agreements and how they actually can be enforced if they’re done the right way!

Disclaimer 1

I should note that while I am not yet a legal practitioner, I am currently a legal graduate trainee who will be eligible to engage in legal practice very soon! So while I cannot advise anyone in a legal capacity at the time of producing this text, I am knowledgeable on the subjects of contract law and international commercial law, and would like to share that knowledge in an informative capacity with my fellow Roblox developers!

Disclaimer 2

This information is intended for all developers on our platform but is specifically addressed to those who regularly enter into development contracts on Roblox as a main source of revenue. Getting scammed can threaten the livelihoods of full-time developers and I hope to prevent that by being as informative as I can!

Also, if you would like to learn more about contracts in general and how they apply to people under the age of 18 years (or minors), you can check out my previous informative piece on Developer Contracts on Roblox!

What are International Contracts and How Are They Different to Normal Contracts?

What is a Contract?
So if you’ve visited my previous post (which I’ve hyperlinked above), you can learn a fair bit about how contracts work (but I warn you there’s a bit of legalese in it). Though to put it in short, a contract is a legally binding agreement between two or more parties to act on promises made to each other. Usually, a contract will require some form of consideration (consideration = payment/exchange of money), among other things, in order to be valid.

What Is an International Contract/Agreement?
Welp, I’d like to say they’re pretty much exactly the same as ordinary contracts, though it’s a little more complicated than that I’m afraid. While international contracts/agreements serve the same function as ordinary contracts, the way they are enforced compared to their domestic counterparts can at times be far more complex.

How Are Contracts Disputed/Settled/Enforced?
As many of you might know, if someone doesn’t hold up their end of the deal in a contract, the widely televised solution is to take them to court over it. Court (which I may refer to as ‘the litigation process’) is generally regarded as a definite solution for any contract problem, but for international contracts, this definitely isn’t the case. In fact, it doesn’t matter what kind of legal problem you have, going to Court can be a brutal process - problems can take months or even years to resolve and the whole process can end up costing you more than you’re actually fighting for.

In resolving international disputes and enforcing international contracts however, there’s additional problems with taking it to Court. When a legal problem involves multiple parties from multiple countries, you have to tackle the problem of arguing over which country the problem should be resolved in before even getting to the original problem itself (insert Shrek side-quest meme here).

The reason international parties to a legal problem will argue over which jurisdiction (laws of a country/state) they want to settle their problem in, is because different countries have different laws that might benefit one party over another.

An Example of What I’m Talking About
To give you a greatly exaggerated example, let’s say a developer (Developer A) in Country A signed a contract to build a game for another developer (Developer B) who is in Country B. Their contract generally reads the following:

  • Developer A will build a game (The Game) for Developer B.
  • Developer B will provide to Developer A $100,000 robux in consideration (payment)
  • The Game will be completed by the 21st of June, 2022.
  • If The Game is not completed by the mentioned completion date, Developer A will be required to compensate Developer B for the loss of revenue that Developer B would have received had The Game been completed on time.

Developer B needed The Game done by the 21st of June just in time for Summer break to kick off so they could advertise it on the platform. So we’ve got our contract, but surprise surprise it is now the 21st of September, 2022 and Developer A has only just completed the game for Developer B. Even though Developer A completed The Game 3 months later than required in their contract with Developer B, Developer A has no plans to compensate Developer B for the potential revenue they missed out on, and so Developer B will not pay Developer A for completing the build.

Ok finally got the scenario set up, here’s where the problem comes into the picture. Developer B wants to sue Developer A but since they are in different countries, they can’t decide which one to go to court in. Developer A wants to settle the problem in court in Country A, because the laws in Country A say that the contract can’t require Developer A to compensate Developer B for finishing The Game late. Developer B wants to settle the problem in court in Country B, because the laws in Country B say that the contract can require the compensation. See the problem yet?

So If Court Isn't the Answer, Then What Is?

Well, fun fact, not every legal problem is actually resolved in court! There’s this nifty little thing called alternative dispute resolution (ADR). ADR is a category of processes that parties to a legal problem can take instead of seeking litigation (going to court). You might have heard of one or two of them, but the three mainstream ADR processes are mediation, arbitration and conciliation. These processes are commonly used to resolve disputes in family courts and elsewhere, but the process primarily used to resolve commercial disputes and the process we are going to talk about here is arbitration.

What is International Commercial Arbitration?

Enforcing the rights you are entitled to under an international contract/agreement can be real difficult, and trying to settle things in Court can just be a colossal mess as we’ve discussed rather extensively in one of the previous sections. Because of these problems, parties to international agreements are generally more inclined to approach commercial arbitration to resolve all their contract problems.

Come On! Hurry Up and Explain It!
International commercial arbitration, or just commercial arbitration in general, is an ADR process where parties to an agreement dispute over their problem in the presence of an arbitrator. An arbitrator is an impartial and neutral third-party whose job it is to hear the dispute then apply the relevant law in order to reach a binding decision.

So How is This Different From Court??
Well there’s a few ways in which the arbitration process differs from litigation (court), but I’ll explain the main ones.

  1. Decisions reached in arbitration are not only binding, but also final. If you go to court over something and you lose, depending on the level of that court, you can appeal your case to a higher court to have it heard a second or even third time where it might succeed or just continue to fail. In arbitration however, all decisions are final and any decision reached in arbitration cannot be appealed to a higher power.

  2. The international commercial arbitration process is protected by international treaties and conventions so that it can’t be exploited in the way that simply going to court can like in the example I provided in one of the above sections.

How Is International Commercial Arbitration Protected/Enforced?
Two main pieces of international text allow for the protection and enforcement of this process, which is yet another reason why many major international corporations (including Roblox Corporation) use arbitration. Those two texts are called the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the Convention on the International Sale of Goods (CISG).

I won’t go into these two texts in extreme detail, though you’re more than welcome to do so yourself if you want more information. Basically, the two texts have each been signed by dozens of countries, agreeing to recognize decisions reached through international commercial arbitration and enforce those decisions upon parties accordingly.

So How Exactly are International Contracts Enforced Through Arbitration?

So before I get into this, let me just explain that a clause is a term within a contract.

It is standard practice for international parties who enter into agreements to include a clause within their contracts that specifies the laws of which country (the jurisdiction) the parties agree to use when entering into the arbitration process in the circumstances that a dispute arises over their contract/agreement. The New York Convention, as mentioned in the previous section, is what requires for signatory countries to recognize any decisions reached through arbitration as valid and to enforce the awards.

So let’s return to our scenario from earlier. Let’s say that this time Developer B was a lot smarter and included a clause in his contract with Developer A so that if they had a disagreement over their contract, the disagreement would be resolved through arbitration using the laws of Country B. So now when Developer A breaks the contract, Developer A can’t try and resolve it in Country A to get out of paying the money he owes because the New York Convention will require for Country A to let it be resolved using the laws of Country B.

But What If the Contract Isn’t Clear or Doesn’t Mention Which Country’s Laws Should be Used in Arbitration?
Well, so long as the contract has a clause requiring the parties to resolve any problems they have from their contract through arbitration, this is where the CISG comes in. This convention basically creates a procedure of default laws to be followed in the resolution of arbitration if the contract is not clear about which country’s laws should actually be used to resolve the disagreement. However, it should be mentioned that parties can opt out of using the general procedures provided by the CISG and continue to argue over which laws they’d rather use if they want to - but this just goes back to the original problem and nobody ever gets anywhere in the end.

Is International Arbitration Really Used That Much and Should I Use It?

Well if you didn’t already know, every single one of you reading this is already in an international contract/agreement which contains a clause for international arbitration! That’s right! Roblox Corporation protects themselves in their own international agreements with the international arbitration process. If you’re interested about taking a look into that specifically, just search up their Terms of Service and scroll down to Clause 11, sub-clause C(1). Every single user on the Roblox platform is in a contractual agreement with Roblox, and the specific clause I just mentioned contains an agreement between you and Roblox to…

“arbitrate all Disputes…between you and [Roblox Corporation] or our affiliates, except Disputes related to our intellectual property rights. You and we empower the arbitrator with the exclusive authority to resolve any Dispute, including without limitation whether or not any part of these Terms is void or voidable”.

If you’re wondering where the part specifying the specific jurisdiction the arbitration will use to resolve any such disputes, scroll down the Terms of Service to sub-clause 11(C)(4), which states that the arbitration…

“will be administered by the American Arbitration Association (the “AAA”) under its Consumer Arbitration Rules (the “AAA Rules”)”.

Ok Cool, Roblox Uses It, But Should I Use It For My Developing Career?
If I were signing a contract to do animation work for a game development team/company on Roblox, I would 100% make sure that the contract contains an arbitration clause.

The reality of development contracts on Roblox is that people just copy paste online templates then replace a couple words and suddenly think they’re secure. This is a terrible practice and if you take your game development career seriously then you should most definitely consider seeking professional legal help to draft a contract to specifically suit your needs and ensure that you are protected in the event that things go south.

Unless all parties to an agreement live in the same country, or even in the same state, the prospect of resolving contractual disputes in court is unlikely. So this especially applies on a platform where the majority of development commissions and employments are conducted between parties in different countries, and stresses the overall importance of securing your interests with international arbitration.

What Are The Key Points to Take Away From All This?
  • International agreements can be risky, especially if the agreements don’t include a clause for mutual agreement on arbitration.
  • If you enter into a contract with people you know are in another country, specifically to help advance your career as a developer on Roblox, you best consult a legal practitioner before signing the contract and seek their advice.
  • If you enter such a contract as I just described in the previous point, look for those arbitration clauses or any other clause that may specify or imply what jurisdiction contractual disputes will be agreed to be resolved in.
  • Honestly just read the whole contract before you sign it. We’re all so quick nowadays to scroll to the bottom and give away our signatures without even reading what rights we may have potentially just signed away. Protect your own interests and make sure that whatever you sign is fair and reasonable to you and not suspicious or misleading in any way.
  • For employers or anyone who is actually making/drafting the contract, unless you’re an actively practicing lawyer do not use free online templates or try to draft a contract by yourself!!! :rofl:

So thanks once again for taking a read guys, I myself felt a lot more confident about entering into Roblox development contracts after learning the information I’ve just shared and I definitely personally feel more competent when it comes to identifying sketchy or potentially dangerous agreements and ably avoiding them.

Please feel free to contact me via Toothpaste#2512 if you have any other questions, but once again I must stress that since I am not yet admitted into legal practice I cannot advise you on any particular legal matter and can only communicate the law to you in an informative capacity.

nd89 :grin:


Amazing work! Read both of your papers and they’re really useful, thanks for this GOLDEN information.