In a decisive legal win, digital artist Danny Casale emerged victorious against a breach of contract lawsuit filed by DigiART, a Florida-based company. DigiART had claimed an existing year-long profit-sharing agreement on the initial drops of Casale’s NFT projects. However, a Florida judge found a critical flaw in the contractual documentation that led to the dismissal of the case.
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Omission found in the contract
Central to the legal tussle was a glaring omission in the contract inked between Casale and DigiART – the absence of a start date. This oversight proved pivotal in Judge Wendy Berger’s decision, dismantling DigiART’s claim over profits generated from Casale’s NFT ventures.
According to the lawsuit, DigiART had asserted exclusive rights to market and sell any NFTs created by Casale from May 2021 to May 2022. They were to leverage their marketing expertise for these NFT projects, splitting the net profits with Casale. Notably, secondary market royalties were to be Casale’s sole entitlement.
The narrative unfolded when Marcel Katz, representing Casale’s physical artworks on the East Coast through his company Art Plug since January 2021, proposed a fresh partnership centered on NFT sales under the DigiART banner. Casale was on board with this new venture.
Following a consensus on profit-sharing and secondary sales, DigiART forwarded a draft agreement to Casale. The email contained details regarding profit sharing but glaringly lacked a start date. Casale, seemingly unbothered by this omission, signed the agreement on April 30, 2021.
Subsequently, a modified contract with the start date of May 2, 2021, was shared by Katz, while Casale awaited his countersigned copy for ten long months.
Coolman’s Universe NFTs
Prior to this agreement, in March 2021, Casale had rolled out an NFT project dubbed Coolman’s Universe, anchored on his Instagram persona, Coolman Coffeedan. DigiART claimed that Katz, under the Casale/DigiART agreement, championed Casale’s work, spotlighting it during Miami Art Week with a unique pop-up in Miami’s design district that featured “the world’s most expensive cup of coffee” at $1,000 per cup, each adorned with Casale’s original artwork.
The Coolman’s Universe 10,000 NFT collection amassed more than ETH 18,000 ($50 million) on OpenSea. Despite the project’s initiation predating the agreement, DigiART alleged that its sales post-contract signing placed Casale “in breach of his obligations” to the collective.
Casale refuted any breach, stressing that neither Katz nor DigiART highlighted any contractual violations, even with full awareness of Coolman’s Universe. The ruling reinforced this, stating:
“DigiART admits that it did not inform [Casale] that his release would be a violation of any agreement until months after it became aware of the Coolman NFT Project.”
DigiART’s lament of fraudulence, alleging that Casale induced them to invest time, money, and efforts in building his brand, found no favor in court. The claim that Casale pocketed “millions of dollars” which he “refused to share with DigiART” was overshadowed by the defective contract.
Judge Berger’s ruling underscored a fundamental tenet of contract law, declaring: “As a general rule, presence of blanks in a contract is fatal to the enforcement.” This ruling delivered a stern reminder of the critical importance of meticulously drafted agreements in the burgeoning sphere of digital art and NFT commerce.