In Australia, An Ebay Sale is a Sale

syousef writes "An eBay sale is a sale says an Australian New South Wales State Judge in a case where a man tried to reneg on the Ebay sale of a 1946 World War II Wirraway aircraft. The seller tried to weasel out of the deal because he'd received a separate offer $100,000 greater than the Ebay sale price. The buyer who had bid the reserve price of $150,000 at the last minute took him to court. 'It follows that, in my view, a binding contract was formed between the plaintiff and the defendant and that it should be specifically enforced,' Justice Rein said in his decision." I haven't found anything like this in previous discussions; have there been similar decisions like this handed down in the US, Canada, or Europe?

Comments

Binding contract

[halcyon1234]

I'm not sure if there really needs to be a case for it. Ebay makes no qualms about bidders and sellers entering a contract, and contract law is pretty well defined as it is.

Re:Binding contract

[ozmanjusri]

here in the US you have the lemon law that allows usually three days to return a car if it's a "lemon".

That wouldn't be far wrong with a Wirraway. They were a locally built copy of the North American NA-16 Texan trainer, and were fitted with two Vickers machine guns more as an act of desperation than hope.

RAAF guys flying 8 of them took on more than 100 Japanese aircraft during a raid on Rabaul. The results were pretty much what you'd expect.

Re:Binding contract

[morgan_greywolf]

Speaking as someone who has purchased cars in an auto auction, it pretty much goes like this:

1. The seller puts the car on the auction block.
2. When registering the car with the auction, the seller sets a reserve price. This is just like the reserve price on eBay -- it's the lowest price the seller agrees to sell the car for.
3. If the highest bidder does not reach the reserve price, the seller can still agree to sell it to the highest bidder. If the seller does not agree, the car is removed from today's list and goes on the auction block another day
4. If the highest bidder does reach the reserve price, the seller is bound by agreement to sell the car at that price.
5. If either buyer or seller back-out when the reserve is met, there is a potential for lawsuits, has the party has breeched their contract.

In this case, the bidder met the reserve, so the seller has to sell it at that price. The Australian is merely following basic contract law, which is pretty much the same as here in the U.S.

Re:Binding contract

[sirwired]

That's my understanding of it. I don't know about auto auctions, because here in the US you have the lemon law that allows usually three days to return a car if it's a "lemon". That's the risk you run of an auction on eBay - someone gets it for less than you wanted to sell it for. No longer caveat emptor, but the seller too!

Just FYI, for the next time you buy a car, there is no such law in the U.S. The actual "Lemon Law" only covers new car purchases, and has nothing to do with any "3 day rule". Have you ever seen those big stickers on used car lots that say, in inch-high letters, "AS IS"? They aren't kidding.

Sellers are not allowed to actively commit fraud (i.e. say the has a new engine when it doesn't), but otherwise, once you buy it, it's yours, unless you have come to some previous agreement with the seller.

There ARE "cooling off" laws, but they only cover in-home purchases (i.e. door-to-door salesmen) and home refinancing contracts.

SirWired

-ian?

[ObsessiveMathsFreak]

Since preciously few business transactions are conducted within the person of citizens of Australia, I'd say this matter is one of only fairly esoteric academic interest.

What's more relevant...

[craznar]

.. is that it means there is no out for buyers to change their mind either :)

Good news for sellers....

Auction vs Sale

[Anonymous Coward]

It has already happend a few times here in Poland that people were obligated by court to sell the auctioned stuff (cars) for the bid amount, that was usually waaay lower then market prices (2 or 3 times lower).

On the other hand - whenever there is a super low bid (lets say sum equal to a few dollars) because somebody forgets to set a minimum price, the court usually decides that the auction is a salesman's mistake and voids it.

Re:Auction vs Sale

[Guido del Confuso]

You have the right idea, but technically that's not correct. Consideration merely refers to the exchange of something of value in order for the contract to be valid. This is mainly to distinguish a contract from, say, a promise, which is (usually) not legally binding. If you promise to do something you're not obligated to do it, but if you promise to do something and someone hands you something of value in exchange for making that promise you may well have entered into a contract. It doesn't have to be adequate compensation to be consideration. See, for example, the legal concept of the peppercorn.

You're confusing consideration with the doctrine of unconscionability. That is where the court will refuse to uphold a contract because the terms are considered grossly unfair to one side. It is not often that this happens, as the courts don't like to interfere in the ability of people to enter into contracts, even bad ones. However, a court will occasionally feel that a person may not have realized what he was signing when he entered into the contract, and this is an option that is available to the court in order to protect the interests of a party that was supposedly taken advantage of.

Also, for what it's worth, a mistake on the part of the seller is not usually a reason for voiding a contract. Only if the court feels that it would be unconscionable to enforce such a contract would it be voided (for example, if you somehow accidentally wrote $10 instead of $100,000 on the sale of a house). If you simply made a mistake as to the value, or even made an honest mistake on a lower order of magnitude (selling a $10 item for 1 cent, for example) the court would most likely enforce it.

In Germany it was the other way around

[Anonymous Coward]

A car dealer made a promotion with a starting price of 1. The car sold at an unreasonably low price and the dealer tried to negate the sale. The court decided that there was a binding contract and the bidder got the car for the low ebay price.

Re:In Germany it was the other way around

[sholden]

That's exactly the same way round.

Does there have to be more precedent?

[Angst Badger]

The legal status of auctions considerably pre-dates electricity, much less the web. I have a feeling that if you tried to argue that there was some difference between a web auction and a traditional auction in a US court, you'd get pretty much the same result this guy did.

In Australian, An Ebay Sale is a Sale

[geeber]

How about that, the word for 'sale' is the same in English and Australian!

Re:Sale..

[AKAImBatman]

Once the auction is complete, it's a sale. Sales are sales, and cannot be reversed after the fact without willingness of both parties, or extenuating circumstances such as a faulty product.

What you're talking about (e.g. "No, you can't have another beer") would actually be the pre-sale negotiations. After the money has been handed over in a store and accepted, the sale has been started. So the bartender had better either give you your beer, or have a good reason under contract law for not doing so. (e.g. If a contract is impossible to fulfill, it can often be reversed. For example: If I sold you a beer, but another employee just drew the last pint for another customer, I would return you your money as it's now impossible for me to give you the beer you ordered.)

The big difference between a bar and eBay is that the contract is agreed to by both parties as soon as the auction ends. Thus the money doesn't have to change hands before the contract goes into effect. This is similar to a sit-down restaurant where you order and consume your food prior to paying. As soon as you order and your order is accepted, the contract is in effect. You imply that you agree to pay for your meal when you order.

You're missing the point

[paladinwannabe2]

The title says 'In Australian an eBay sale is a Sale', one of many delightful typos we can expect from our 'editors'. He is pointing out this typo in a subtle, yet humorous manner, apparently too subtle for you.

Re:You're missing the point

[fbjon]

You and the GP forget that the language can also be referred to as Australian. Hence the grammatically correct "In Australian.." rather than "In an Australian.."

Re:You're missing the point

[donscarletti]

In Australia we generally speak English. There is somewhat of an Australian dialect but I assure you that no judge speaks it.

Re:Sale..

[ubuwalker31]

Ah, legalese often confuses non-lawyers, and for good reason...its highly technical and specific.

An auction is a *type* of sale. The auction itself is merely a method of attaining a price. The contract of sale is created on the falling of the auctioneer's hammer, or similar event. If a reserve price is not reached, the goods may be sold to the highest bidder, or withdrawn. Whether or not an online 'auction' falls under the common law definition of an auction is highly dependent upon each country's law...and in this case, I believe the judge says that it does, which might be a departure from existing Australian Common Law.

The interesting thing about this case is that the Judge gave the winner the airplane. Usually, if you win a court case like this, you only get money damages unless the goods are unique or very rare. A World War II Wirraway plane, 1 of 5 left in the world, certainly qualifies for the legal remedy of "specific performance".

The right way to do this

[Rob T Firefly]

Many sellers of high-value items on eBay throw in a line like "the seller reserves the right to cancel this auction for any reason," which I imagine would leave the seller the option to go with some sort of last-minute offer like the one in this case. However, said high offer would be outside eBay, and therefore not subject to any of the protections against fraud or simply chinging one's mind in the eBay system.

I'm not much of a fan of how things are done on eBay, but I do know there are proper ways for sellers to tailor eBay's system a bit more toward to what they want to do.

But there are right ways to use the buying process as well. If Mr. $250,000 was all that into buying the plane, why didn't he simply bid on the auction? He might have even beat the high bidder with a lower price.

Re:The right way to do this

[Anonymous Coward]

It wasn't a last minute offer. It was an offer after the auction closed. And the seller cannot cancel the auction after the auction has closed. That disclaimer only works up until the end of the auction.

Auto sales too?

[Sparr0]

I haven't read EBay's policies lately, but I think I recall that they say that auctions for cars are NOT binding contracts... I would probably expect the same to apply to airplanes, if that is still the case. Too busy to look it up now, maybe I will later or a friendly karma whore will reply :)

Re:Auto sales too?

[AKAImBatman]

You know, I remember eBay motors working that way as well. The idea was that the auctions would be used to set a sale price prior to the finalization of the contract, subject to an agreeable price and inspection of the vehicle. However, eBay must have changed things because I can't find any references to the eBay car auctions being non-binding.

I imagine that eBay decided it was better to offer VIN lookup services rather than deal with the hassle of bids that don't go through.

Re:Auto sales too?

[debrain]

I haven't read EBay's policies lately, but I think I recall that they say that auctions for cars are NOT binding contracts... I would probably expect the same to apply to airplanes, if that is still the case. Too busy to look it up now, maybe I will later or a friendly karma whore will reply :)


Cars are typically subject to a regulatory regime and so they are often outside the laws of chattels, goods and services. Cars are also not unique, rather they are really the opposite: fungible. As a fungible entity, if a buyer breaks a deal then the seller can find another buyer fairly readily (within reason, and subject to the lost profit for that car and interest). Similarly if a seller of a car breaks a deal, the buyer can find another seller (subject to foreseeable costs of having to wait to find the another seller).

The Court's opinion of the sale of this WWII airplane gave rise to the extraordinary remedy of 'specific enforcement' because it is a unique chattel. In other words, whereas the Court is generally inclined to award damages (fines) in lieu of the sale, in this case the seller is being subject to the government's monopoly on force in order to transfer ownership of the airplane to the buyer in exchange for the payment they had agreed upon.

Early cancellation

[phorm]

What I wonder about is when a bidder cancels the auction just before close. In one case, I had a really good price on an item, and just before ending the seller closed the auction with the reason "item was found to be lost/broken"

I watched the seller for awhile to see if he re-listed and tried to sell the same item, as I think he just didn't get the high bids he had hoped for, but after a while said to heck with it. What would the obligations of a seller be in this case?

Re:Early cancellation

[Lumpy]

A seller can only cancel an auction. Bidders cant.

and as a bidder you are at the whims of the seller until the closing price and bid has been accepted then it's a legal and binding contract.

As a seller I can screw with you all I want cancel and relist auctions every time I see you as winning bidder. I have to pay for every relisting though, so it's not free.

Only the idiots that do not know how to use ebay do that crap. But then I also feel that only the dummies that do not know what an auction is use the stupid "reserve" system. I will not bid on any item that has a reserve, if you dont have the balls to put an item out for the price you want for it then dont list it.

Re:Early cancellation

[log0n]

Just a heads up (got bit by this recently - nothing sinister)... you can't cancel an auction within the last 12 or 24 hours regardless if it has bids (Ie: cancel all bids and close it - doesn't work). Once it hits that 12/24 hour point of now return, you gotta ride it.

Used to not be like this.

I got bit trying to sell something locally on Craigslist (obscure gear and the local market would most likely latch - but ebay was my backup), had a local buyer, but couldn't end the auction.

Re:Early cancellation

[tlhIngan]

What I wonder about is when a bidder cancels the auction just before close. In one case, I had a really good price on an item, and just before ending the seller closed the auction with the reason "item was found to be lost/broken"

I watched the seller for awhile to see if he re-listed and tried to sell the same item, as I think he just didn't get the high bids he had hoped for, but after a while said to heck with it. What would the obligations of a seller be in this case?

It's perfectly legal to do that, as the "sale" hasn't officially happened yet. It's a bit tricky with auctions, since the official sale happens when the auction ends, while in regular retail sales, it happens when money is exchanged. Perhaps the closest analogy happens for say, e-commerce. You buy an item, but the seller decides he doesn't want to sell it to you and cancels your order - it's still legal, as the sale hasn't happened yet. He may even have taken your money, but if said product hasn't left his door, he's under no obligation to complete the sale (of course, he will have to give you a refund or it becomes fraud).

Like the recent Dell case - Dell didn't ship anyone their goods, so they had the power to cancel all their orders (the case was about what remedies could be had in the case - forced arbitration). The older Amazon case, where officially Amazon undercharged people and shipped them product, is something where the consumer's in the right, since the sale has occurred, and a seller has no recourse to recoup the losses from consumers who actually received the inadvertently discounted product.

So your eBay seller decided the auction wasn't going to end the way he wanted, and removed the product from sale before the sale was compelte. In the case of the article, though, the seller didn't cancel the auction, and thus the sale was made.

It's also like that state department trying to get rid of surplus, and putting stuff on eBay to sell. It didn't sell well, but they never cancelled their auction, leading them to have to sell the equipment at cut-rate prices (or face legal ramifications).

Re:Early cancellation

[Anonymous Coward]

and pay a crapload in listing fees? are you mad?

Re:Early cancellation

[Registered Coward v2]

A seller can only cancel an auction. Bidders cant.

and as a bidder you are at the whims of the seller until the closing price and bid has been accepted then it's a legal and binding contract.

As a seller I can screw with you all I want cancel and relist auctions every time I see you as winning bidder. I have to pay for every relisting though, so it's not free.

True, but buyers can retract bids; unethical ones can create a second account and put in an absurdly high bid then simply never pay to cancel out their bid.

There is the second chance offer - something I refuse to accept on principal. I've gotten one immediately after an auction closed because the buyer backed out; but the bidding was in numerous $5 increments by the same unknown bidder until my high bid was beaten. The seller then offered a me a second chance buy immediately after the auction closed. That smelled too much like shill bidding (although I can't prove it)to find my final price and try to sell it at that price; another had a "second item" that they would sell for my high bid.

My rule is I'll only consider ones where the buyer offers it at my highest price before the first non-wining bidder bid; not my final highest bid. Sure I was willing to buy it at that price but do not feel any obligation to help a (possibly) unethical seller get a higher price than then they would from a legitimate auction.

I've only had a couple of those type experiences on eBay; otherwise I've been quite happy as a buyer and seller.

Re:Early cancellation

[Reziac]

That's exactly what they're hoping for, tho -- auction fever. Same reason lots of stuff starts at "1 cent, no reserve". That will get tons more bids than the same item started at a fair price, and the final price will usually be higher, too.

Of course, having been bit a few times by minimum bids, most sellers now set shipping/handling at what they REALLY wanted to get for the item, to ensure that they get "paid" regardless.

Personally, I don't look at "reserve not met" auctions, since as you say I want to have SOME clue what the seller really thinks it is worth, and not have to piddlefuck around hunting for the reserve price (which in my observation, usually proves to be higher than the actual value of the item).

That's why I like Buy It Now. Tells me what the seller expects to get, and if I like the price, great; if not, I don't need to waste my time.

(Actually, I hate auctions.. I want the price to be the price, not have to guess at it nor have what I pay partly determined by other people's guessing at the price... which is what bidding really is: *guessing* what someone will pay in the end.)

Re:Early cancellation

[Lumpy]

Of course, having been bit a few times by minimum bids, most sellers now set shipping/handling at what they REALLY wanted to get for the item, to ensure that they get "paid" regardless.

report the auction to ebay, it get's pulled and they have to pay the listing price. Ebay does not allow shipping padding as it's ebay fees circumvention. I report listings selling stuff for $0.99 with insane shipping all the time, they usually get taken down in 4-6 hours.

Ebay users are the only defense at these guys making up the difference in shipping.

Re:Early cancellation

[drawfour]

There is the second chance offer - something I refuse to accept on principal. I've gotten one immediately after an auction closed because the buyer backed out; but the bidding was in numerous $5 increments by the same unknown bidder until my high bid was beaten. The seller then offered a me a second chance buy immediately after the auction closed. That smelled too much like shill bidding (although I can't prove it)to find my final price and try to sell it at that price; another had a "second item" that they would sell for my high bid.

My rule is I'll only consider ones where the buyer offers it at my highest price before the first non-wining bidder bid; not my final highest bid. Sure I was willing to buy it at that price but do not feel any obligation to help a (possibly) unethical seller get a higher price than then they would from a legitimate auction.

I had a similar experience when bidding on a motorcycle on E-bay. I put in my max bid of $3500, and had to leave to complete my motorcycle safety training. At the time my bid went in, it was $3200. Just a few minutes before I left, I got an outbid notification. Oh well, I'll find something else. Then a minute later, I got an email (through ebay) from the person who outbid me saying "You can't outbid me, buddy. Let's keep this thing rolling." So some ass-hat was goading me into trying to bid more. I just walked away.

A day or so later, I got a second-chance auction, to buy it for the $3500, which was my "last bid". I wrote to the seller, explained to him that between my $3200 and $3500 bid, the only bids were from someone who apparently was only trying to ruin the auction, and thus I felt that my $3200 bid is what he should sell it to me for.

He agreed, which surprised me. I thought for sure he would decline, and if he had, I would have reported him and his "buddy" to ebay, using the email I received as some form of evidence, even if not absolute. I picked up the bike that weekend, and I noticed that the seller had given the bidder negative feedback, and the bidder had given negative feedback to the seller. I thought that showed everything was legit -- they wouldn't have dinged each other if they were working w/ each other to try to extract more money.

Is the sale binding?

[bigrigdriver]

A few minutes spent with Google search reveals that sale negitiations are not binding UNTIL the seller accepts an offer from a potential byer. Then it becomes a contract to sell. Makes no difference if the negotiation is face to face or over the internet.

At least, that's the opinion of US and UK law.

Re:Makes some sense, but ....

[magarity]

I think MOST shunned buyers would just be a little disappointed and get on with their lives
 
That's true for all the miscellany whatnot that changes hands on eBay. The article in question here is over 6 figures and for a vintage aircraft of which there are only 5 left in the world. Not a knicknack that dozens of sellers are peddling. This is hardly a whiny loser with a frivolous case.

"Sort-of" Selling Online - Guns and Other Stuff

[BenEnglishAtHome]

I find this interesting. If you advertise something for sale, shouldn't you have to sell it? Not everywhere, apparently.

Nearly all the firearms-specific versions of EBay, like gunbroker.com, are filled with offerings of used guns that basically say "Subject to prior sale. I'm putting up this web page but if someone comes in my shop and gives me money, you're out of luck. If I decide I don't like you, you're out of luck." This strikes me as quite unfair and unprofessional.

Even some professional-looking web sites that sell things don't really offer them for sale. If you go to Charles Double Reed looking for a new bassoon to purchase, you can't just put it in your shopping cart and send them money. Oh, no. The disclaimer ("Clicking the add to my cart button below does not guarantee that this instrument will be available to you.") makes it clear that they get to decide if you're the kind of person they want to do business with.

Yeah, yeah, yeah, I've seen those "No shoes, no shirt, no service" signs. I realize sellers have a right to decide who they want to do business with. But this whole business of offering things for sale and then jerking them back at the last second, seemingly at random, just strikes me as symbolic of a "I don't have to follow any nominal rules of social interaction; I make my own" mindset that seems more and more common these days.

Are people just getting ruder, stupider, and prouder of it?

Re:"Sort-of" Selling Online - Guns and Other Stuff

[Angst Badger]

Are people just getting ruder, stupider, and prouder of it?

Well, yes, but I wouldn't worry too much about it in this context. I'm not a big fan of the notion that free markets can solve all kinds of problems, but one problem they can definitely solve is shitty service. Vendors who annoy their customers have a tendency to go out of business and be replaced by vendors who don't.

That said, if I guy came into my store and wanted to buy a gun and a bassoon, I'd be wary of him, too.

Re:"Sort-of" Selling Online - Guns and Other Stuff

[BlueNoteMKVI]

My business sells items on eBay, in an online store and in a physical storefront. Many times we have a very unique item - for example, a vintage musical instrument - that's available for sale in all three places at once. We put similar disclaimers in every auction we post and on our site.

Normally if we put it up for auction on eBay it will sell for far less than if we were to sell it to someone in the store (or even on our own website) so it does not make good business sense for us to take it off the sales floor or down from the website until it's sold. The salesmen in the store don't have access to our eBay system and not all of them can access the website back end. If they sell the item, they notify the web people who take it down, but that process may take a few hours (or days, on the weekend). This can also happen with commodity items also, if someone comes in and buys the last box of reeds. We're working on a solution that will integrate our in-store sales with the website database but that still won't cover eBay auctions. I won't even get into the issues of synchronizing the database with real life - we take inventory on a regular basis and always have to adjust something in the computer.

The disclaimer about "may be sold in the store" also encourages people to come into the store. More traffic in the store means more money coming in, whether they buy that specific item or something else. When we list auctions like that we get many phone calls asking what the in-store price is, and some of those end up in sales. eBay's "but it now" feature disappears when the first bid is made, so the "may be sold in store" feature acts as another backup "buy it now." That also saves on eBay fees (which can be ridiculous) if we can get more than one sale out of one auction or sell the item in the store (if we cancel the auction, eBay doesn't charge a final value fee). We are VERY careful to make sure the auctions are canceled before they end if we sell the item elsewhere.

There's nothing random about it. I'll sell a saxophone to anyone with the money to pay for it, whether it's online or in the store. We've told a few people not to come back because they have a history of being poor customers (bounced checks, rude to salespeople, break things then return them) but that happens rarely and only after a long history of the same garbage. We don't arbitrarily decide that this guy looks black/white/jewish/muslim/shifty-eyed/scuzzy so we won't sell to him. I see nothing un-fair about it either - you have just as much opportunity as the next guy to come in the store if you're local or order over the phone if you're not.

Rude, stupid? Not really. I think it would be more rude to let you bid on the auction or buy online without letting you know that the item might have already sold. It comes down to having multiple simultaneous sales channels (which is just good business) for the same item without a centralized database. If you REALLY want the item, buy it now or risk losing it. That's life.

Re:"Sort-of" Selling Online - Guns and Other Stuff

[lysse]

No, actually. At least under English law, it goes along with the doctrine that the contract of sale is formed only at the point at which an offer to purchase is accepted - so for example, in a supermarket, when the buyer presents an item to the cashier they are actually making an offer to purchase that item, and the cashier can either accept or reject that offer. "Offering" an item for sale in a shop is merely making an invitation to treat. The principle has been relied on a number of times over the last century or so; some notable cases are Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401, Partridge v Crittenden [1968] 1 WLR 1204, and Fisher v Bell [1961] 1 QB 394. Of course, as a seller you can't act deceptively (eg. bait & switch), and once you've accepted an offer to purchase at a specific price you're bound by it, but up until the formation of a contract both parties have the right to walk away.

(IANAL, this isn't advice, To Serve Man is a cookbook... you know the drill)

Common Sense?

[bepolite]

I had a similar situation occur (on a much smaller scale) while in high school. Isn't this pretty well established law? Once you agree sell something you can't back out because you get a higher offer.

Re:Sale..

[AKAImBatman]

As soon as you receive what you ordered in a restaurant, and consumed.. then you have accepted.

No, the contract is formed prior to the consumption. The terms of the contract, however, are not completed until the food have been received. (From what I understand, consumption is more or less irrelevant from a legal standpoint. What if you took your food to go?)

You are not expected to pay for the restaurants incompetence/mistake.

Correct. This is a failure by the restaurant to carry through on its responsibilities under the contract. If the restaurant either states or implies a certain level of quality or service, you have every right to expect that level of quality or service. Of course, a restaurant may disagree with you, in which case it would take a judge to decide if the restaurant really did carry out it responsibilities under the contract, or if you were making unreasonable demands upon the restaurant that are not part of the implied contract.

Disclaimer: IANAL, but who the hell really is around here? We have so few lawyers, it's shocking. :-/

Re:Sale..

[rainman_bc]

eBay is an auction. Not a sale. That doesn't make a difference. The questions is whether or not it's a contract.

There's five things that make a contract:

1. Offer
2. Acceptance
3. Consideration
4. Intention
5. Capacity

Whether this occurs at an online auction, a B&M auction, or at a department store doesn't really matter. What matters is those five points.

At a B&M sales, judges have decided that the offer is when the consumer takes the merchandise to the counter, and the acceptance is when the cashier rings it in. The consideration is the goods that you brought, and your intention to contract is clear when you bring that merchandise. As long as your not an invalid capacity is there.

In an auction is clearly obvious. You offer $100,000 for a plane. The auctioneer stated that the highest winning bid will be accepted. They do this at the time they set up the auction (they COULD have set a reserve - a reserve would state that they will consider lower prices but are not bound contractually). I agree with the judge in this case - tough shit for the guy trying to weasel out of his contract - he should have looked into the value of his plane more before auctioning it on ebay.

Ultimately, this will be a mistake

[tkrotchko]

"Thus the money doesn't have to change hands before the contract goes into effect."

This is probably a mistake in the long run, because now we'll start fiddling around with when a contract is in effect. For example, if an auction can only be paid for via PayPal, and the person bids, wins, and then doesn't pay for a few days, is there a sale or not?

If you leave it at "once money changes hands, it's a contract", then it's simple to remember and enforce. It's better for everyone, because it encourages the buyer to get the money to the seller as quickly as possible. And the buyer knows as soon as he pays for it, it's his, even if not in his possession.

Re:Ultimately, this will be a mistake

[Control Group]

No, it's not a mistake; it's the foundation of almost all contract law. The whole point of a contract is to guarantee future performance, be it delivery of goods, money, or service. If the contract isn't in effect until the delivery has happened, what good is the contract? As a somewhat degenerate case, if the contract isn't in effect until the money has changed hands, it would be impossible to perform a credit card transaction for more than $25 (look at the bottom of the document you sign). It would, in fact, be impossible to have a credit card, since you would claim that you didn't owe Visa any money; your contract was void until money changed hands.

The point of purchase transaction is a special case of contract; the exchange of goods for money itself serves as the contract, as opposed to a written agreement specifying the terms of the contract.

In the case of eBay - according, at least, to the rules promulgated by eBay, and dependent upon a US court upholding them as valid - the contract is in effect upon bid. That's what the bidder agreed to when submitting the bid, and the seller agreed to when offering the item for auction (subject to reserve price). It is no less well-defined than an exchange of money; there's no reason to think it's somehow more ambiguous.

The point is, you can't make contracts only effective upon exchange of money, since the very idea of a contract depends upon its authority over future performance.

1946 World War II ?

[jolyonr]

Well, I know that Australia are ahead of us because of the time difference, but this is ridiculous!

Jolyon

Similar things in Europe

[gweihir]

The perhaps most famous case was in Gemany, were some car dealer aucioned off a new a car, but it got a pretty low price, about 25% of its worth. The seller tried to renege on the contract, but a court decided that a binding offer had been made and the car had to be sold to the highest bidder at the auction end-price. As far as I remeber no appeal was allowed because the case was obvious. So in Germany an eBay auction offer is a legally binding offer and if the highest bid is low, you have to sell for that price nonetheless.

Re:Similar things in Europe

[3247]

As far as I remeber no appeal was allowed because the case was obvious.

Actually, there was an appeal... and another appeal on top of that.

The first instance court, the Landgericht Münster (~ District Court of Münster) said that the "auction" was not a binding contract whereas the court of appeal, the Oberlandesgericht Hamm (~ Higher District Court of Hamm) judged that it was. This appeal decision was then confirmed by the Bundesgerichtshof (~ Federal Supreme Court).

The bottom line(s):

• It's not that obvious.
• There were appeals.
• The ruling is confirmed by the supreme court of Germany.

Re:Ebay Item

[magarity]

Models of vehicles that were build during the war years (because they were for the war) are still referred to as being a war model even if they were still in production a year later just due to association. The planes in question were apparently made from 1939 - 1946, which is definitely a war model: http://en.wikipedia.org/wiki/CAC_Wirraway

Confused on the Timeline

[Wingmanjd01]

Wait a minute...Wasn't the war over in 1945? Why is there a 1946 WWII airplane, or am I missing something?

Where is the fraud alert..

[Technician]

Nobody thought the offer was too good to be true? I think the court may have saved this guy from a fraudulent buyer. Who offers 100,000 over the sales price without being in the bidding? That alone is a red flag. How many times are sellers items up for bid send offers outside the auction channel offering more money but avoiding pay-pal and etc. Here is an extra $5,000 for the item. Please forward 2,000 to my shipping agent by Western Union and keep the extra 3,000 for yourself.

Just what were the terms of the offer outside the auction channel?

The court decision may have saved the seller a bundle of money.

Re:Sale..

[mcrbids]

That's an agreement between you and eBay, presubambly, not you and the bidders.

Have you read the agreement yourself? Sounds like either you have not read the agreement, or.... (moron?) I'm hoping and praying, in the name of intellectual discussion, that it's the first. It's probably clear by the end of very first sentence, which reads:

When a seller lists an item on eBay, and a buyer bids for and wins that item, the seller and buyer have entered into a contract.

In Canada...

[th3_ev1l_m0nk3y]

Once the auction ends, a binding sales agreement has ben formed, under contract law. Once bidding starts, the auction cannot be stopped and the item must be sold to the highest bidder, unless a reserve has been specified before the auction begins. Bids may be retracted before the sale is complete, but once the auctioneer announces that the item has been sold, the highest un-retracted bid is binding.

In Poland we had...

[Vo1t]

... a similar situation. It was a Kia SUV as far as I remember. After the end of the auction the seller told the highest bidder that he must be crazy if he thinks he will really sell the car for such sum (something like 1000USD or something, 10x less than its worth). The buyer got pissed off and took him to court. He won. I don't know where the case is at the moment, whether the buyer got the car or something else. All I know, that the amount of people looking for such "bargains" (some of them are created by accident - pressed ENTER too quickly, or the seller sucks at computer skills) increased. If such a seeker finds such a bargain he threatens him to take the case to court. On the other hand, the amount of cheaters, like the seller in the story, decreased.
I think that in general, such precedence is a good thing. Just to give a lesson that you can get punished for cheating on the Internet.

Re:Sale..

[Firethorn]

Generally speaking though, you should cease consuming the meal when you become aware that it's unsuitable. If you clean your plate it's generally considered that the meal was acceptible.

Re:no Reserve

[Dare nMc]

That's exactly what they're hoping for, tho -- auction fever.

I agree reserve sucks, but I do think their are plenty of other reasons for a reserve.

1) judge demand for a custom product, I may need $500 to build one, but I could mass produce at $200 each, if I get interest lower...
2) local sell, friend is willing to buy my car, set a reserve of $5000 sell it to him for the highest bid if the gain isn't enough to risk ebay fraud.
3) re-listing costs money, if I later decide I would part with it for $4500, but my highest bid was $2000, don't bother.

It does piss me off when they have a reserve set at a value over 95% of a "buy it now" price. That is clearly to judge demand at a lower price, but what a waste for the buyer.