Ebay – the legal position

No question about it, I, like millions of others, love Ebay, and have used the site successfully many times in the last few years both for buying and selling, without a problem. This doesn’t stop me, as a lawyer, having some worries about the site and whether or not there are more problems and disputes

Home » Disputes » Ebay – the legal position

No question about it, I, like millions of others, love Ebay, and have used the site successfully many times in the last few years both for buying and selling, without a problem.

This doesn’t stop me, as a lawyer, having some worries about the site and whether or not there are more problems and disputes than meet the eye.

My natural degree of caution, from my experiences as a lawyer, are also combined with a story I was told by another lawyer going back to the early days of Ebay.

He had a client that specialized in selling pristine condition popular autobiographies of famous people who had signed the book at a book signing. The seller would queue up for hours and sometimes days to get these sought after autographs. He sold an item on Ebay from a  very famous political figure. With the book, the sale price was well over £1,000.00 and it appeared the buyer was a trader in these items and thought he could make a turn on it. When he couldn’t he got very nasty and demanded his money back. The selling client, who had done nothing wrong whatsoever, politely said no. The buyer then, over a period of months, devised a way of duping the seller, via other Ebay and email accounts to divulge his address. Soon thereafter, the seller received a visit and was beaten up quite badly.

I am sure this a very rare occurrence and one which could have happened in any business context, but it does evidence that things can go wrong.

So, what happens if the seller has misled the buyer or is a fraudster ?

The above is a crucial issue and no doubt one which many Ebayers think about.

The Ebay terms and conditions state that it, Ebay, is effectively an arbitrator between buyer and seller. Either can raise a dispute. If Ebay finds in favour of the buyer, it can seek to deduct funds from the seller’s Paypal account and/or other payment facilities the seller may be obliged to provide to Paypal. That sounds good, but what if the seller leaves no money in paypal and closes any connected bank accounts and “does a runner” ?

Is Ebay obliged to make a payment to the buyer in those circumstances ? The answer is no, as Ebay’s dispute resolution policy makes clear, in stating :-

For seller unresolved cases, we may:

 

  • remove funds from the seller’s PayPal account to reimburse the buyer for the cost of the item and the original postage cost; or

 

  • where there are insufficient funds in the seller’s PayPal account or where PayPal is not the reimbursement method of the seller, directly refund the buyer for the cost of the item and the original postage cost, and, in this case, we will require the seller to reimburse us for the refund;

Of course the crucial word in all of the above is “may”, meaning they may but are not obliged to.

So, whilst a buyer has a significant degree of protection, especially as Ebay owns Paypal, there is no 100% guarantee that if you are a dissatisfied buyer you will get your money back.

What about contract law ?

This is another very interesting aspect of Ebay.

When you win an auction or press “Buy it now” a contract is created. The seller’s description of the items for sale is included in the contract and is important.

Setting aside the millions of items of small value sold on Ebay every day, there are also a large number of very expensive items for sale, so clearly, it’s important to get contract terms accurate and not to misrepresent the position.

With very  expensive items, it is probably a good and cost effective suggestion to get a lawyer to check them over but there is a scant evidence I have found from running some tests this afternoon that many people actually do this.

Here is an interesting advert we came across this afternoon for the sale of a business, no small undertaking, priced at just under £30,000.00 on a “Buy it now” basis. Among the lengthy particulars of sale are the following statements :-

  • HERE WE HAVE FOR SALE THE LEASE / BUSINESS FOR  OUR PUBLIC HOUSE / SPORTS BAR / RESTAURANT / FUNCTION ROOM / 3 BED MAISONETTE ALL FIXTURES AND FITTINGS INCLUDED IN SALE.
  • COMPLETELY FREHHOLD SO HAS NO TIES TO ANY BREWRY AND CAN SELL ANY ALCOHOL YOU REQUIRE
  • GREAT TURNOVER £25,000 PER MONTH SINCE RE-OPENING 4 MONTHS AGO THIS IS  NOT INCLUDING FOOD SALES AND FUNCTIONS ETC
  • RECENTLY UNDERGONE A £44,900+ RE-FURB 4 MONTHS AGO
  • OUTSIDE FRONT – 8 X NEW PUB BENCHES (£1000) / NEW NEON SPORTS BAR SIGN FLASHES RED AND BLUE (£850) / 4 FLASHING RED NEON ARROWS (£650) / 6 X SOL WINDBREAKERS (£350) / 4 X COMERCIAL PARASOLS (£200) / ETC      TOTAL= £3050

The above are just a small sample from a much longer list – with due respect to the seller, anyone who contemplated buying a business like this based on a short set of particulars would need their head examining for starters. Moreover, you probably don’t need to be a lawyer to realise that there are some very basic and fundamentally confused statements in the excerpt. For example, the seller seems to be selling a lease to premises but then describes what he/she is selling as “completely frehhold”.

If any of this small sample of pre-contract statements turn out to be materially incorrect, a buyer could sue for negligent or possibly fraudulent misrepresentation. The statements made would be part of the contract.

If you have any problems arising from Ebay or other auction site, and need legal help, we can assist. We can also assist with drafting contract terms for you if you are selling some very valuable items online.

Disputes • James Swede

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