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A sale is a legally binding contract
(even when it’s $100,000)

By Chris Dawson March 10, 2018 - 4:04 pm

There have been two interesting stories this week concerning placing bids online – one where a seller accepted a bid and then tried to cancel the sale and the other where a buyer made a £180,000 bid and immediately changed his mind (which you can read about here). In both cases a legally binding contract was formed which is going to cost the affected parties mind boggling sums of money.

The back story to the $100,000 case goes back to February 2014 when a seller listed a 10 caret diamond ring on eBay on a fixed price listing. After agreeing to meet a potential buyer in person if he purchased so that the ring could be verified it was as described, the buyer clicked Buy It Now on eBay.

A glitch with the eBay verification process prevented the buyer from completing the purchase immediately, but buyer and seller made arrangements for him to fly Pheonix to complete the purchase in person and he duly bought a plane ticket.

Later that evening the seller received an email from a second potential buyer offering $150,000 and they convinced her to cancel the first purchase and sell to them and this is where the troubles started. The first buyer wasn’t prepared to be fobbed off and sued on the basis that the ring was worth significantly more than his contact for $100,000 and so he had lost out on a substantial profit.

Eventually the second buyer settled by paying $60,000 to the original buyer in recompense for gazumping him and, deducting the $60,000 already received and the $100,000 he would have had to pay to purchase the ring, the courts awarded $135,250 damages to be paid by the seller.

The moral of the story is that a sale is a legally binding contract and once a buyer has clicked the Buy It Now button (or placed a winning bid) on eBay or other online marketplaces, you’re obliged to complete the contract and supply the goods. Failure to do so could leave you open to being sued.

  • BRYAN GOSTLING
    7 months ago

    If an ebay sale is a legally binding contract, it is time Ebay supported its sellers when buyers do not pay .Perhaps by automatically charging the buyers account or card in same way as they do to sellers to issue refunds.

    • alan paterson
      7 months ago

      @ Bryan , I do not think that would be practical – it would only result in the buyer returning the item for a refund (which they have a right to do). More hassle more cost.

      You can easily get your fees back from ebay by opening an unpaid item case. No harm done?

    • Ratso Restorations
      7 months ago

      Couldn`t agree more with Bryan – had one buyer purchase two items in one weekend recently and then cancelled both items. It does cost the seller the listing fee and it does potentially lose another sale as someone else may have purchased the item in the time that it was not available on ebay for sale so sorry Alan but you are mistaken when you say “no harm done”.

      Chances of Ebay supporting the seller against such time wasters?? NOWT!!

    • Alan Paterson
      7 months ago

      You do get your selling fees back if you open an unpaid item case. Not sure about listing fees but surely thats only a few pence.

      BOO HOO. Its called selling online………

      Do you get cancellations on Amazon, other plaforms? web sites? Off course you do! You even get cancelations from shops. but in this case you expect ebay to do what? Force the buyer to take the item? Doh!

      You are just getting more returns that way if the item is shipped. It would seem that common sense is not very common.

      Let us keep the buyers happy so they will be repeat buyers. that means coming back to ebay. You sell on ebay- yes?

    • 7 months ago

      As Alan Paterson said, what is the point of forcing a buyer to pay for an item when they have changed their mind?

      Whilst you may have the right to do so, they also have the right to send the item back.

      If you have forced them to buy an item they do not want and then they have to return the item they are more likely to say the item is broken or not fit for purpose so you pay to have the item sent back.

      In this event, not only do you not have the item to sell, it can cost you a lot more in postage, and… even if the buyer is honest and pays for the return postage, you are also still out of pocket by 1x postage and your item being in transit for up to two weeks.

      How is that good business? All I can see is a loss making situation.

    • northumbrian
      7 months ago

      its one thing keeping buyers happy and another entirely,
      aiding and abetting fraud and criminal behaviour
      especially at the expense of sellers who dont have the reserves or capital to absorb it

  • Rob
    7 months ago

    I used to use best offer feature often but have all but taken it off most of my listings now. For two reasons, firstly saves the hassle of of some buyers who start off at 10% and then wonder why you reject their offers and also with buy it now they have to pay for it straight away. Always get a few who would not pay after accepting an offer and have to chase for payment. Every so often would check the buyer activity log to see how many have been blocked from making a best offer as they have 2 or more non paying item strikes on their account. Some months would have a list of 20 or more.
    If a buyer wins an auction at a low price they still expect their item, so if a buyer bids on an item they should pay for it.
    What about for the private sellers who have used ebay’s low final value fees offers, sell item for a good price buyer does not pay. Then have to relist, sell for less but pay more fees.
    Had tons of excuses, from pressed the wrong button which they must of done two or three times to confirm the purchase and payment. To their 4 year old child made the best offer (which was only slightly less than asking price)

    • 6 months ago

      If a buyer wants to cancel due to a change of mind, do you allow it or insist they pay?

      If you make them pay do you get many returns or problems?

    • Rob
      6 months ago

      You can’t force them to pay, but if they don’t I usually open a case to start with for non payment and then close it for non payment instead of cancelling. Most of my items I sell on ebay I only have one available to sell so usually means can’t sell it for a week while you wait to see if they will pay and to close the case.
      If they pay and then come up with the hundred and one excuses from the cat walking across the computer to their child buying the item usually cancel it as you know as soon as they get the item they will make up an excuse not to pay the return postage.

  • 6 months ago

    It’s bizarrely complicated to so a seller-initiated cancellation and to guarantee getting your fees back. Easier to do a UPI.

  • northumbrian
    6 months ago

    if you allow cancellations
    for any reason out of convenience and expediency
    it makes the current bidder restriction settings on ebay redundant and pointless

    • 6 months ago

      @northumbrian

      And if you force a buyer to complete the transaction, only to have them return the item, you are out of pocket.

      A genuine buyer may keep the item or they may return it and pay the postage. A less than honest buyer may claim it was faulty etc and get you to pay for the return, as you forced them to complete the transaction. increasing your loss.

      Are you in the business of losing money?

  • northumbrian
    6 months ago

    we use discretion
    were old enough and ugly enough

    to get it right most times ,
    we will cancel if the request is reasonable or plausible
    though in general we dont cancel
    i