This is a small note for those who have donated to the Cloakcoin development fundraising.


The question is whether those who paid for the fundraising has a right to refund.

The decisive factor is whether an agreement has been entered into.

An agreement has been entered into if there is an «offer and accept», see Unidroit Principles article 2.1.2, DCFR II.-4: 201. Alternatively, an agreement can be entered into if someone has been given reasonable grounds to believe that an agreement has been entered into. The rule is a result of case-law. I’ll discuss the questions separately.

To conclude if there is an “offer and accept” it is important to assess how “clear, definite and final” the statement to the one who makes a promise is. The website of cloakcoin uses terms like "donate for development" and "donate with bitcoin ...". A natural linguistic understanding of the words "donate for development" indicates that the cloak team offers development for a fee. The statement is clear, definite and final. In my opinion, the fact that "donate for development" is aimed at an indefinite circle of people cannot exempt the statement from being characterized as an offer.

Alternatively, the question is whether the recipient of the promise has been given reasonable grounds to believe that an agreement has been entered into. The answer will depend on an overall assessment of which not only information on the website, but also other statements that the cloakcoin people have made.


Effects of the agreement

Given that an agreement has been made the main rule is that agreements shall be kept (pacta sunt servanda). To begin with, a recipient of a promise can demand to uphold the agreement.

The one who has made a promise can as an exception withdraw from the agreement in exchange for paying compensation. The recipient of the promise has an unconditional right for refund. The recipient is also entitled to compensation if the conditions for compensation are met (financial loss and causation). Also check out rules and regulations around interest for overdue payments.


Lastly is whether this might become an illegal/unlawful conduct.

To begin with a donation does not mean that the ownership of the money passes from the donor to the recipient. Even if someone can control a thing physically, it does not mean that that person has the right of ownership. Using the money for another purpose without the donor's consent might be embezzlement or financial infidelity. Pure inaction on the part of the donor is not a consent. Usually it will be illegal under any country's law to use other people's money without their consent.