The popular streamer James Varga, aka “PhantomL0rd,” could receive more than $50,000 in his lawsuit against Twitch after a judge ruled that this maximum stipulated by the company was unfair.
James initiated legal action against Twitch after his account was suspended in 2016. The cause of the ban was the accusation that the streamer was running a gambling casino with skins as a reward – but additionally, that he did it fraudulently, since the results were allegedly manipulated to favor James.
Varga appealed the decision that seemed unfair, taking the case to court. Although a verdict is not yet reached, the streamer has won a small battle over a clause of the Twitch contract.
A unilateral contract
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As indicated, Twitch tried to shield itself against lawsuits so that, if lost, the plaintiff could not claim more than $50,000 in damages. This clause would be found in all Streamers’ contracts on the platform. Today, a judge has ruled it unfair.
In August of this year, a three-day hearing was held where all the evidence and testimonies to date were analyzed. Judge Karnow indicates that there was procedural unconscionability, which resulted in a unilateral benefit in favor of Twitch.
The clause that limits compensation for damages does not make sense according to the judge, – or at least, not if the contract were fair to both parties. At the time of Varga’s ban, the streamer already averaged earnings between $5,000 and $10,000 per month, so $50,000 is a ridiculous figure according to the ruling.
Because streamers can get much more money with their work on Twitch, the judge considers this clause to be a preventive measure so that there are no possibilities to sue the company. The contract does not stipulate fees for lawyers, so they would have to charge a high percentage of that $50,000 if they win the case, which would end up leaving very little profit for the plaintiff.
Although this is a blow for Twitch that could influence the next Twitch contracts, the case has not yet been closed. Indifferently of this clause, it has not yet been demonstrated that Varga’s ban was unfair, so it does not affect the company’s arguments that Vargas is misrepresenting the facts and that he did participate in illegal commercial acts.
Nor does it help the case of PhantomL0rd that part of his testimony was based on the idea that “he did not know that the pages of the digital contract could be turned over” which means that he did not read the document he signed. The judge thought this was unthinkable, considering that Varga is familiar with the operation of a computer.