Kotaku and the Technicolor Contract Clause

Okay, I did a little digging, found a copy of the terms, and section 6.3 of the contract does, indeed, provide a mechanism for refunds. I don't want to post the terms because I don't know if I legally can and I don't want to get on Apple's bad side, but let me give you my take on this: Kotaku is blowing things way out of proportion. This article is unnecessarily incendiary, contains factual errors, and was poorly researched at best (it took me less than an hour to track down a copy of the actual contract). That's not journalism, it's tabloid sensationalism designed to garner page-hits and advertising revenue.

Let me break it down:

First of all, this is not a new term. It has been in the store agreement for some time, probably since the beginning.

Second of all, the contract term discusses specific reasons for the refund. Basically, you have to breach your own warranty or some other legal obligation for this clause to come into effect. In other words, if you screw up and Apple has to issue a refund as a result, then you're out the 30%. This is not a precursor to out-and-out, uninhibited refunds on the App Store at your expense. Kotaku says this:

If customers can claim refunds hassle-free (and there is a 90 day refund window) this means developers could actually face the prospect of going into debt as people download and play the game to completion and then claim a refund for whatever reason. Obviously good for consumers but not for developers.

But that's not what the contract clause says. If Apple offers a no-hassle refund, then the conditions of this clause are not met. If the reason for the refund is that the user doesn't like the program or changed his or her mind, then there are no contract terms that specifically address the situation, and equity would dictate that you refund 70%, and Apple refunds 30%. The ninety-day window is actually generous because most jurisdictions have a much longer statute of limitations than 90 days on breach of contract.

So, it's not a rumor. It's not new. It's not patently unfair. It's a standard contract clause that's been there all along and which is designed to protect Apple from developers who break contractual obligations or legal obligations.

Unless we see changes to 6.3 (and the version I read is from the contract update this week), then I'm calling bullshit on this "rumor". Return to your lives, people. There's nothing to see here.

Disclaimer: I am not your lawyer, so if you have any doubts, have your lawyer review the contract.

Update: Some people dispute my reading of this contract clause. That's fine, and that's exactly why I suggest you get a lawyer rather than rely on my word. However, I believe those interpretations are wrong because they are based on the lay definition of the terms "claim" and "notice". Legally speaking, a claim isn't just somebody saying "give me my money back". Here's what a claim is:

To demand or assert as a right. Facts that combine to give rise to a legally enforceable right or judicial action.

To demand or assert a right. Rights are established by law or by other obligation, such as those established in a contract or warranty. You simply can't read legal documents based on the common usage of terms. That's why you should have a lawyer read any contract you sign. And even that's not foolproof. Not all lawyers will interpret this the same, nor will all judges.

So, don't take my word for it, but don't take Kotaku's, and if you haven't had legal training, don't take your own advice either.