Quote from: Stephen Gornick on November 13, 2012, 11:17:54 AM

Quote from: JoelKatz on November 13, 2012, 09:44:03 AM

Aug 10 08:10:41 mainly because the 15,500 coins I hold on deposit are not invest in BS&T

If you lend me $1, and I haven't done anything with it, then I still hold that $1 that was deposited. But If I lend that $1 to someone else, I no longer can say that I hold $1 on deposit.

You don't say that you hold a deposit when you no longer hold those funds and instead have turned around and lent those funds out.

You might make the argument that Patrick made a mistake and used the wrong words (versus intentionally trying to deceive).

In context, I don't think it was possible to understand what he said that way. This was preceded by:

Aug 10 08:07:21 I run a slightly complicated business, but most of the deposit accounts I run are BS&T free

I think both sides clearly understood that Patrick's "deposit accounts" were in fact loans. If there was any confusion about that, that would be a separate issue.

In fact, I can't see how that could be misunderstood. If he had 10,000 BTC on deposit, he would have 10,000 BTC sitting around, but he'd also owe 10,000 BTC. So how would that help cover a default? He has to have been referring to his loan portfolio. (If he had said it was a "reserve", you'd have a point.)

Quote

Quote from: JoelKatz on November 13, 2012, 10:23:27 AM

The issue in this case is that both Patrick and those who loaned him money made precisely the same mistake,

Nobody else but Patrick is "on trial" here though.

Right, but we can't do that without figuring out how to handle a case their contract didn't cover. When we do that, it makes a difference how you apportion fault on the two sides.

For example, say you represented that there were 1,500 pounds of cherries on a truck and I bought it from you for $3,000. If I don't pay you the money, and there weren't actually 1,500 pounds of cherries on the truck, we can't just conclude that I owe you the $3,000 the contract specified because you didn't provide me the 1,500 pounds of cherries the contract specified.

Now, saw we both determined there were 1,500 pounds of cherries on the truck and we were both wrong. It's still inequitable to make me pay you the entire $3,000, making me suffer all the losses that flowed from a common mistake, when the fault was both of ours equally. We have to adjust the amount owed based on things like the relative fault. (But not just the relative fault. As I argued elsewhere, it's complicated.)

We can't assess whether Patrick is in default unless we asses how much he should pay. And we can't do that until we apportion fault among the parties. (However, as I've also argued elsewhere, we may be able to skip this process if we can agree on an amount so low it's obviously fair to make Patrick pay at least that and then show he hasn't even paid that amount. I've suggested 40% over three years as this amount.)