NFT Ownership Disputes Resolution Quiz

1. What is the primary mechanism for resolving NFT disputes?

• Litigation.
• Mediation.
• Arbitration.
• Negotiation.

2. Why is arbitration considered efficient for NFT disputes?

• It leads to mandatory public hearings that can prolong the process.
• It involves a jury trial which is time-consuming and expensive.
• It requires all parties to disclose personal information to the public.
• It allows for the selection of arbitrators with technical and legal credentials, and it is a private proceeding.

3. How do NFT rights get defined?

• NFT rights depend solely on the sale platform`s policies.
• NFT rights are established through social media agreements.
• NFT rights are defined in a smart contract on the blockchain platform.
• NFT rights are determined by the creator alone without any contracts.

4. When does title pass in an NFT transaction?

• Title passes when the NFT purchaser accepts the contract’s terms.
• Title passes after the transaction is recorded on the blockchain.
• Title passes when the NFT is delivered to the buyer`s wallet.
• Title passes only when payment is completed.

5. What is required for the NFT purchaser to complete the transaction?

• Consideration, such as making payment or executing as required by the seller.
• Automatic approval from a third party.
• Providing proof of previous ownership.
• Direct ownership transfer without agreement.

6. How are subsequent transactions governed in an NFT?

• Subsequent transactions are usually governed by the smart contract or code programmed into the NFT.
• Subsequent transactions are managed by the sales platform`s customer service team.
• Subsequent transactions are determined by the NFT creator’s personal preferences.
• Subsequent transactions are typically resolved through arbitration conducted by a third party.

7. What is the role of the blockchain in NFT transactions?

• The blockchain creates a digital certificate for the NFT.
• The blockchain verifies the identity of the buyer and seller.
• The blockchain records ownership and any subsequent transactions.
• The blockchain stores the physical location of the artwork.

8. Can a platform possess an NFT without owning it?

• No, platforms can own NFTs without any legal ties.
• Yes, platforms can possess NFTs freely without restrictions.
• No, it is highly unusual for an NFT to provide this capability in its terms.
• Yes, ownership is not necessary for platforms to showcase NFTs.

9. What commercial laws apply to the sale of an NFT?

• NFT sales have no legal framework and are purely governed by user agreements.
• All sales of NFTs are subject entirely to international trade laws.
• There are significant uncertainties, but courts sometimes apply UCC Article 2 by analogy, and state common law can also be used.
• Only federal patent laws exclusively govern NFT sales.

10. How can a sale cancellation be handled in an NFT transaction?

• The NFT can be `burned` to remove it from the blockchain, or a cancellation can be executed via smart contract to change the record of ownership.
• The NFT can be transferred to another buyer without any official records.
• The NFT can be duplicated and sold again to resolve the issue.
• The NFT can be returned to the seller for a refund through email communication.

11. What are the mechanics of deleting an NFT?

• Deleting an NFT requires transferring it to a different owner.
• Deleting an NFT can be achieved by removing it from a digital wallet.
• Deleting an NFT is done by writing over its data with new information.
• Deleting an NFT involves `burning` it to remove it from the blockchain.

12. What happens if a new owner has already been recorded before cancellation?

• A cancellation on the blockchain (potentially via smart contract) is needed to change the record of ownership.
• Ownership is automatically reverted to the original owner without action.
• The new owner retains all rights immediately regardless of the prior record.
• The cancellation is ignored, and previous ownership remains valid indefinitely.

13. Can a sales platform’s terms and conditions protect it from involvement in disputes over an NFT?

• Yes, terms and conditions can protect the platform only in cases of theft.
• Yes, carefully drafted terms and conditions can limit its liability, especially if the platform uses an existing public blockchain.
• No, terms and conditions have no effect on disputes over NFTs at all.
• No, the platform must always be involved in disputes, regardless of conditions.

14. What are the implications for a sales platform if it uses a proprietary blockchain?

• The platform can guarantee that all NFTs will remain dispute-free.
• The platform is likely to be involved in disputes over an NFT minted on its proprietary blockchain.
• The platform will have no legal liability for any transactions.
• The platform will automatically enforce all ownership transfers without issues.

15. How can a platform ensure that title will transfer to the buyer?

• The platform must require buyers to submit personal identification documents.
• The platform needs to have contractual ability to force the seller to transfer possession.
• The platform needs to verify the seller`s past transaction history.
• The platform should randomly select buyers for ownership transfer.

16. What legal principle applies to the ownership of stolen NFTs?

• Digital contracts replace all ownership laws regarding theft.
• There are no legal principles applicable to the ownership of stolen NFTs.
• Traditional laws pertaining to ownership and possession of stolen goods apply, such as in New York where good title does not pass to thieves.
• Ownership of stolen NFTs is determined solely by the NFT platform`s rules.

17. Can a purchaser unknowingly buy a stolen NFT?

• Yes, it is mandatory.
• No, it is prohibited.
• No, it is illegal.
• Yes, it is possible.

18. What happens if a copyright owner transfers the copyright after licensing it?

• The user can oppose the right to use against the assignee of the copyright (Article 63-2 of the Copyright Law).
• The user automatically loses all rights to the copyrighted material.
• The user must pay additional fees to the new copyright owner.
• The copyright becomes invalid and cannot be used.

19. How do licensing agreements address NFT digital art?

• Licensing agreements limit NFT holders` access to the digital art.
• Licensing agreements prohibit the use of NFT digital art by holders.
• Licensing agreements grant the NFT Marketplace `the right to license NFT digital art to NFT holders.`
• Licensing agreements transfer full ownership of digital art to NFT holders.

20. What is the significance of the New York Convention in international arbitration?

• The New York Convention regulates intellectual property rights globally.
• The New York Convention establishes national courts as the primary dispute resolution mechanism.
• The New York Convention eliminates the need for contracts in international agreements.
• The New York Convention enforces international arbitration awards, which is critical for dispute resolution.

21. How can disputes over NFTs be resolved efficiently?

• Mediation
• Arbitration
• Litigation
• Negotiation

22. What is the purpose of a sample dispute resolution provision in NFT transactions?

• The purpose is to avoid the appearance of home-court bias and ensure speedy resolution.
• The purpose is to allow buyers to resell NFTs without restrictions.
• The purpose is to enforce copyright laws on digital art.
• The purpose is to ensure that all transactions are conducted in person.

23. What are the key considerations in drafting sale contracts for NFT art?

• Sale contracts should be drafted with extraordinary specificity and reasonableness to avoid unfair or harsh results.
• Sale contracts should focus primarily on the seller`s preferences and needs.
• Sale contracts must be vague to allow for flexibility in negotiations.
• Sale contracts should only address pricing without regard for other considerations.

24. How do courts apply principles of good faith, fair dealing, conscionability, and commercial reasonableness in NFT disputes?

• Courts only apply these principles when both parties agree.
• Courts ignore the principles in favor of contractual agreements.
• Courts apply these principles to avoid results that seem unfair or harsh.
• Courts disregard these principles in all NFT disputes.

25. What bankruptcy risk is of grave concern in NFT transactions?

• The risk is that buyers may not receive the physical artwork associated with the NFT.
• The risk is that NFTs can be easily duplicated, affecting ownership.
• The risk is that NFTs could lose their artistic value after the transaction.
• The risk is that the bankrupt site’s obligations to the buyer could be deemed “executory contracts” that could be rejected in the site’s bankruptcy.

26. How do licensees of copyrights fare in bankruptcy?

• Licensees of copyrights receive the same protection as trademark licensees.
• Licensees of copyrights are fully protected from any bankruptcy claims.
• Licensees of copyrights can secure their rights indefinitely in bankruptcy.
• Licensees of copyrights are not protected against rejection like other intellectual property licensees.

27. What remedies are available in the event of a dispute over an NFT?

• All disputes must be settled through public court hearings.
• Refunds for digital assets are automatically permitted by law.
• The remedy provided for in the contract should be stated precisely.
• Customers can directly contact the NFT creator for support.

28. Can a sales platform’s terms and conditions protect it from involvement in disputes over an NFT minted on a proprietary blockchain?

• Yes, carefully drafted terms and conditions can limit its liability, especially if the platform uses an existing public blockchain.
• No, it is unlikely that the platform can avoid all disputes regardless of its terms and conditions.
• Yes, all sales platforms are protected under any circumstances due to their terms and conditions.
• No, proprietary blockchains always absolve platforms from any involvement in disputes.

29. What are the implications for a sales platform if it facilitates a transaction over an existing public blockchain?

• The platform is only tangentially involved and can limit its liability with carefully drafted terms and conditions.
• The platform can charge higher fees for public blockchain transactions.
• The platform takes full responsibility for the transaction and all disputes.
• The platform has complete control over the blockchain`s operations.

30. How can a sales platform ensure it is not involved in disputes over an NFT?

• By creating a proprietary blockchain without clear guidelines.
• By ignoring the legal aspects of NFT transactions.
• By using an existing public blockchain and having carefully drafted terms and conditions.
• By allowing unrestricted user agreements without terms.