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In Australia, An Ebay Sale is a Sale 267

Posted by Zonk
from the almost-by-definition dept.
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?
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In Australia, An Ebay Sale is a Sale

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  • Binding contract (Score:4, Insightful)

    by halcyon1234 (834388) <halcyon1234@hotmail.com> on Friday August 03, 2007 @10:56AM (#20101427) Journal
    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.
  • -ian? (Score:5, Funny)

    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.
    • If that's not satire, then I'll point out that people in China could say the same thing about the US (maybe you are Chinese though and not American, but your statement seems very american to me..).
      • 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.
        • by fbjon (692006) on Friday August 03, 2007 @11:15AM (#20101793) Homepage Journal
          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: (Score:3, Insightful)

            by donscarletti (569232)
            In Australia we generally speak English. There is somewhat of an Australian dialect but I assure you that no judge speaks it.
        • I agree with the person who replied to you.. I noticed the typo but thought of it as the language. Hmm..

          In Soviet Russian, an eBay Sale is a Sale

          Just doesn't really work.
        • by 1u3hr (530656)
          The title says 'In Australian an eBay sale is a Sale', one of many delightful typos...

          That's a joke -- as a definition in Australian (the language, aka Strine).

          However, as Crocodile Dundee might say: That's not a typo, "a man tried to reneg" is a typo.

      • by faloi (738831)
        I think you missed the greater swipe at l337 /. editing. "In Australian" can be taken a couple of ways. The way that I took it, that caused me to reread the title several times, was that Australia has its own language called Australian. The way the OP took it was that conducting a sale inside a person from Australian "In [an] Australian..."

        Hate to break up your anti-US sentiment though.
        • :P anti-US sentiment is what makes my life worth living. I like to call it 'rational realistic objectivismification' rather than anti-US sentiment though.
  • by craznar (710808) on Friday August 03, 2007 @10:58AM (#20101467) Homepage
    .. is that it means there is no out for buyers to change their mind either :)

    Good news for sellers....
    • by vux984 (928602)
      I've ended up winning several purchases I no longer wanted for various reasons, and there are a number of partial solutions, which sellers in my experience have been quite agreeable to.

      As many of these purchases are very small and shipping is the dominant cost, I just pay the purchase price and advise the seller I have no interest in taking delivery. He can toss it in the trash, or much more likely -

      In the case of a larger item that I once won, I negotiated with the 2nd place winner to pay the difference be
    • That is the way that real auctions work. Do you think that you could just walk into Sotheby's or Christie's, register as a bidder, bid, and then refuse to pay? Just try that in real life and see what happens. If eBay wants to be taken seriously then they need to clean out the trash, otherwise they will always be relegated to bit player type items because nobody in their right mind would trust them to sell big ticket items such as unique real estate, rare automobiles, valuable art, or any other item in exces
  • I haven't actually heard of anything like this going to court here in the U.S.A.

    eBay constantly warns users that bids are legally binding contracts and so forth. But when it comes to a seller deciding not to sell an item, I think MOST shunned buyers would just be a little disappointed and get on with their lives. When you know you've bid really low for an item, and it looks like you're going to win it anyway - you KNOW the seller wasn't planning on giving it away so inexpensively. You consider it a "stea
    • You consider it a "steal of a deal" if it really goes through, and if not - you know it seemed "too good to be true" anyway.

      Thats why some sellers set up shill bidding [wikipedia.org]. That way they won't get stuck with too low a price on the sale.

      • by 1u3hr (530656)
        Thats why some sellers set up shill bidding. That way they won't get stuck with too low a price on the sale.

        Shill bidding is an attempt to make buyers think they have competition and make them bid more. That's why it's banned by any decent auction house. Just be upfront and set a reserve price.

    • by magarity (164372) on Friday August 03, 2007 @11:19AM (#20101857)
      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.
    • by HexaByte (817350)
      It wasn't worth going to court for, but I once had one of the big e-bay sellers, who starts every auction at $0.99, sell me a "lot" of one item for very little money. Low and behold they "LOST" it and couldn't complete the sale. The next week that very same number of the exact same item was for sale separately! Because they are VERY big sellers, e-bay will do nothing about them. However, they have been forced to move their warehouse because the Attorney General of the state they were in was looking at t
    • by jedidiah (1196)
      Well. Most people aren't selling 150K antique fighter airplanes.

      This is not your usual Ebay auction.
    • by HPNpilot (735362)
      I have bid on a number of items, won them, and the sellers refused to sell. My view is that if the price reached was too low, too bad. I didn't set up the auction so I didn't set the terms - the seller did!

      Did I give negative feedback? No. Why not? Because I didn't feel these deals were worth the retaliatory negative feedback. Ebay's feedback policy artificially boosts their average feedback numbers so they can say that overall satisfaction is higher than it really is.

      In a few cases I paid and never r
  • Auction vs Sale (Score:4, Informative)

    by Anonymous Coward on Friday August 03, 2007 @11:00AM (#20101515)
    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.
    • 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.

      That's what's known as "consideration". Whenever there is a contract, it should provide some sort of benefit to both parties of the contract. If the contract is heavily lopsided toward one party, the judge may decide that it's unreasonable as no "consideration" is given to the other party.

      Since we're talking a

      • Re: (Score:3, Insightful)

        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
  • by 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 [typepad.com] that there was a binding contract and the bidder got the car for the low ebay price.
  • by Angst Badger (8636) on Friday August 03, 2007 @11:02AM (#20101549)
    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.
    • I think that's the way it should be. Particularly when eBay says that a bid is a contract in many localities. There's two sidees to the contract then, if the bidder is held to the demand that they must pay the said price for said item, then that demand doesn't make sense unless the item has to go for the bid price if it meets the reserve.
  • by geeber (520231) on Friday August 03, 2007 @11:03AM (#20101565)
    How about that, the word for 'sale' is the same in English and Australian!
  • by Rob T Firefly (844560) on Friday August 03, 2007 @11:13AM (#20101767) Homepage Journal
    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: (Score:2, Informative)

      by 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.
    • 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.

      The key is that under the law you cannot simply cancel a completed auction - when the hammer falls, a binding contract between the bidder and seller is created. Barring unusual extenuating circumstances, like the item not being the sellers to sell in the firs

  • Auto sales too? (Score:3, Informative)

    by Sparr0 (451780) <sparr0@gmail.com> on Friday August 03, 2007 @11:13AM (#20101769) Homepage Journal
    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: (Score:3, Interesting)

      by AKAImBatman (238306)
      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: (Score:3, Informative)

      by debrain (29228)
      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,
      • ...in this case the seller is being subject to the government's monopoly on force in order to transfer ownership of the [WWII] airplane to the buyer in exchange for the payment they had agreed upon.
        I'd love to see what that would look like.
  • 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.
    • You need to look up laws for auctions. In an auction, the seller agrees to accept the highest bid given when he puts the item up for sale. The only protection the seller has is that he can set a reserve price. As long as the bids are below the reserve, the seller reserves the right not to sell the item.

      In the case of the item in the article, the reserve price was met. Therefore the bidder was going into the sale with the understanding that the seller already agreed to sell for the high bid. Reneging after t
  • In Australia, "reneg" is spelled "renege". Or is this some Variety-journalese for "renegotiate"?

    Just kidding. Another stupid typo that a spellcheck would have fixed if the editors could be bothered.

  • by BenEnglishAtHome (449670) * on Friday August 03, 2007 @11:22AM (#20101905)

    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 [charlesmusic.com] 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: (Score:3, Interesting)

      by Angst Badger (8636)
      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.
    • by mcmonkey (96054)

      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.

      Sounds like you're taking these policies a bit too personally. Most likely it has nothing to do with which "kind of person they want to do business with." Rather, one of two situations exist.

      One, the web site advertises t

    • 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.

      Considering the legalities wrapped around a firearms sale in the USA, this is not terribly surprising. Keep in mind that a sale directly to you from a sel

    • Unlike Ebay, where it seems most sellers sell online only, the situations you describe sound like sellers that sell both online and at a retail store. As such, it's much more difficult to control two possible avenues for sale of the same product, especially if they're not monitoring all their online sales in real-time. You can imagine how difficult this would be. Say someone walks into their store and wants to buy an item 30 minutes before the auction of the same item ends online. Do they a) sell the item t
    • There is a difference if the sale is an auction. eBay sells out the rules and each party agrees to them. Many people would call this a contract. If I make my own web site and offer items for sale can make my own rules and you can agree to them or not. There is no contract untill both parties agree. The details of how contracts work and what is a contract depends on where in the world you are so we can't argu fine point here. I'm in California and I'm sure the law is differnt in mexico or even Nevada
  • Common Sense? (Score:2, Interesting)

    by bepolite (972314)
    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.
    • by Aladrin (926209)
      On the other hand, it IS possible for the buyer to back out on EBay. They'll get a visible strike on their record (oh noes!) and that's it. They are not forced to conclude the sale. Why should the seller be any different?

      At this point, the dumbest thing the seller did was tell the truth. He should have claimed the aircraft failed an inspection, then realized his 'mistake' and continued the sale with the second buyer. He'd have been free and clear.

      In a perfect world, neither side would ever back down fr
      • by nasch (598556)
        I don't think it would have mattered. The plaintiff's case was not based on the fact that the seller got a better offer, but that a contract had been entered, and the seller breached it. Lying about it wouldn't have improved anything, and at worst would have gotten him perjury or contempt of court of whatever charge applies in Australia if the judge found out about it and was in a bad mood. And if I were a judge and a defendant lied to me, I would probably be in a bad mood.
    • The "deal is a deal" approach seems only fair to me. But apparently reneging is fair practice. It was quite common in the UK, maybe 25 years ago when there was a seller's market, for people buying houses to find their agreed upon price suddenly outbid. There was even a special word invented for the phenomenon: gazumping.

      Personally I don't see why anyone should get away with reneging on an auction sale. If you put an item up for auction "just to test the water" you should get what's coming to you. If you wer
  • by jolyonr (560227) on Friday August 03, 2007 @11:45AM (#20102251) Homepage
    Well, I know that Australia are ahead of us because of the time difference, but this is ridiculous!

    Jolyon
  • by gweihir (88907) on Friday August 03, 2007 @11:48AM (#20102289)
    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: (Score:3, Informative)

      by 3247 (161794)

      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 t
  • by Wingmanjd01 (987076) on Friday August 03, 2007 @12:01PM (#20102481) Homepage
    Wait a minute...Wasn't the war over in 1945? Why is there a 1946 WWII airplane, or am I missing something?
  • What the seller could have done is offered the original buyer a portion of the difference between the original price and the higher price. That is, the original price was 150K and the new price was 250K, so offer the original buyer 10K. The seller makes $90K more than he had before, and the seller is compensated for the loss of the purchase. Heck, even if the buyer got $50K, the the seller would still have netted $50K more than with the original sale.
  • by Technician (215283) on Friday August 03, 2007 @12:13PM (#20102643)
    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.
  • See this is why you should never respond to emails asking you what the reserve price is as they are from snipers waiting to bid that exact amount in the last 10 seconds.
  • In Canada... (Score:3, Interesting)

    by th3_ev1l_m0nk3y (1122123) on Friday August 03, 2007 @12:44PM (#20103131)
    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.
  • by Vo1t (1079521)
    ... 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 b

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