eBay -- A sale's a sale?

eBay sal is a sale, court says
A WWII Wirraway airplane, one of only five known to be flying was offered on eBay at a reserve price of AU$150,000 (US$128,640 according to this site). The sole bidder sniped it with 20 seconds to go in the auction and won the bidding. Unfortunately the owner had already agreed to sell the aircraft offline for AU$250,000 (US$215,000, ibid) – only he didn’t cancel the auction. The NSW Supreme Court ruled that the the sale was binding and ordered the man to turn over the aircraft at the auction price.

On one hand I agree that the buyer and seller are bound by the eBay rules, which clearly state that offering an item or bidding on an item constitutes a legal contract. On the other hand we’re not talking about a vintage G.I. Joe or a used camera. I’ve seen many auctions where the buyer will state that the item is subject to local sale and might not be available to the winner of the auction. For the majority of eBay items I think it’s reasonable to assume that the buyer is not advertising them in the Recycler. But in the case of a vehicle, especially an aircraft, isn’t it reasonable to assume that the seller is pursuing other avenues? In this case it’s not as if the buyer decided his reserve price was not high enough and changed his mind about the sale. He’d already agreed to sell the aircraft to another party – a ‘local sale’, if you will. He may have just forgotten to end the auction early. An oversight. Should the buyer have prevailed because of an error made by the seller? Or was the court correct.

If you were the buyer, what would you have done? Take it to court as the buyer did? Or just leave negative feedback and look for another aircraft? (Not that you would find another Wirraway, but something similar like an SNJ/AT-6/Harvard.)

I agree with the court’s ruling.
If the seller had stipulated that the item was subject to prior sale, than that would be a different story. Otherwise, the seller could make up any reason to back out of the sale.
Also, i don’t feel the least bit sorry for the seller - if he wasn’t willing to take the final price, he should have started it higher, or had a higher reserve.

Interesting case. I see this going to Great Debates.
As for how I feel, I think you’re spot on. If you’re trying to drive up the price, you’re going to list it in different areas.
Do the Ebay terms of use say anything about “legal and binding” anything?

Oh yeah!..

For what it’s worth, I would never have assumed that.

But then, I’m not the type to be buying or selling aircraft.

I just entered a bid on a Cessna 172 (but did not confirm, of course). Under the confirmation button is this:

But that’s for buyers. I haven’t listed anything recently, so I don’t have a quote about the sellers’ responsibilities.


What about a car? And if the eBay seller happens to be a dealer?

From eBay:

Well, “expected to enter the contract” is different than something that’s legal.

There’s gotta be some Ebay precedence going on here. Someone must have got into a similar situation before.

I hope the same judge uses the exact logic on a buyer that jokingly enters a high bid on something. You owe them $7,000,000 for that Civic.

Absolutely not. It’s eminently reasonable to assume that if a person puts an item up for auction, that he agrees to sell it to the highest bidder. Otherwise, what exactly is the point of having an auction?

That’s undoubtedly against eBay rules, and likely illegal. I’ve seen sellers say they will cancel an auction if there is not enough interest, which I disagree with, but which, as far as I know, is allowed. But I’ve never seen a single-item auction where the seller says he might sell the item locally while the auction is still running. Are you sure it wasn’t a “dutch” auction, where more than one of the same item is available? I can see how that might happen if the seller ran out of inventory.

I think it depends on the error. If the seller accidentally listed something for $500 instead of $5000 or something like that, then that’s a legitimate mistake. But “I was gonna sell it out from under you but I forgot to cancel the auction”? I say too bad for him. I applaud the decision. Now if we could just get someone to force non-paying winning bidders to pay for the items they bid on, we’d really have something.

It’s been awhile since the class I took, but I’m thinking it meets the legal requirements of an enforceable contract (especially since the court seems to have ruled thusly). I’m sure one of our resident experts will weigh in.

Actually, I’m wondering if this precedent also means that one could sue a non-paying bidder for payment? I would think so.

What did the court rule regarding the other buyer (the non e-bay buyer)? Was that sale deemed invalid or something? And what was the reasoning regarding invalidating that contract?

I haven’t seen all the text of the auction, but I believe the court was correct. Unless it was specifically stipulated that the plane was being offered locally as well as online, the both parties are completely on the hook to complete the transaction. I have seen auctions that say the item, usually a vehicle, is also for sale locally and that the auction may be ended at any time. The sellers biggest mistake was in not closing the auction once he had sold it offline.

I don’t believe the court was ruling on that transaction. The other buyer may well run a separate case, but I would have thought more likely he’d do a private deal with the winner of the bid.

As you said, it isn’t a used camera or a GI Joe. You don’t “oversight” something that’s worth 128-215 thousand dollars.

He sold the same thing to two people. That was dumb. Too bad for him that the person with the better claim also had the lower price.

He should take the 150k and send the buyer round to the other bloke to collect his plane.

I’ve been in this position as both seller and buyer. As a buyer I knew my winning bid was well under what the item was worth so I gracefully let it slide. As a seller, I’ve sucked it up more times than I care to remember. Incidentally, I gave up on listing items with bargain starting prices - that sort of thing is a loony magnet.

This happens all the time - it’s just that most often, the item is of such low value that it is not worth the buyer’s time, trouble and expense to try to enforce the contract.

I thought it was the case that eBay forbade listings stating that the item was also being advertised for sale elsewhere, but I can’t find the rule, if it exists.

Often folks aren’t too sure what something is worth in general terms - so they list it on eBay to sniff out the market price, and get a lot of exposure to potential (offline, off eBay buyers) In any case a contract is supposed to mean something, however.

Right. How would it also work with fake bids? What about a legitimate misbid (like someone’s kid clicked it)?

While the legal principle that the judge applied is well established, there is another legal principle at work in the situation you describe and that is a buyer has no right to snap up a clearly mistaken or erroneous offer. Even if the buyer is serious about the offer because he mistook “a Hopi diamond” for the Hope diamond there is “no meeting of the minds” on the offer and thus it is invalid. The joke offer is similarly invalid.

In the OP’s case suppose the original offerer had access to a second identical plane which he was willing to sell exactly as stated, would he not want the sale to be upheld if the buyer wanted to back out? In any case even the successful bidder may not know the precise level of rarity of the plane he bid on. You certainly cannot impute your own knowledge about an item to an unidentified potential cutomer.