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eBay PowerSeller Nick Sevino (a pseudonym) answers questions about buying and selling on eBay.
Nick,
I just can't sit on the sidelines without responding to the comments you made in a previous column: http://www.auctionbytes.com/cab/abu/y203/m03/abu0090/s06.
The statement that "An Auction is a binding contract between buyer and seller to purchase and sell an item..." is not true. Although eBay makes a point of saying that a bid is a binding contract, that too is untrue. Contract Law states that there must be two items present to create a contract. The first is an offer (in our case, a bid). The second is acceptance of that offer (in our case, this is generally the end of the auction). An offer is just an offer is just an offer. A contract is not made when an offer is extended - only when accepted by the seller. The final part of a contract includes the exchange of consideration (payment and delivery of the item) between the two parties.
So you see, an offer to buy is NOT a legally binding contract until accepted by the seller. Even then, it is not enforceable if a material condition of the sale is not disclosed in advance. If (this is the big if) the seller failed to disclose such ridiculous shipping charges in the auction description, the "contract" cannot be enforced.
Think about it this way: Let's say that you enter a store to buy a pair of jeans that are clearly marked $25.00. You take them to the checkout and the bill totals $100.00. Would you pay? In this instance, the store added a handling charge of $75.00 of which you were unaware. Even if the store posted a sign that said, "Additional handling charges may apply", you are NOT required to complete the sale. When the store said, "That will be $100.00 please...", all that has happened is that a counter-offer was made by the store. At that point it is up to you to either complete the transaction or decline.
One final example: Let's imagine that while going to the store to buy your jeans, a person in the parking lot approaches you and offers to buy your car for $1,000. Does the mere offer create a binding contract? I think you see my point....
Best regards,
Gary
Gary,
If you go to a physical Auction you have to put down a deposit. The goods are put up on the Auction Block. The high bidder gets the goods. The seller does not have the option of backing out and neither does the buyer. All sales are considered final. If the buyer backs out, his deposit is forfeit. Auctions are not considered the same as going to a store. There's an article in Maine Antique Digest about the issue of contracts and auctions:
http://www.maineantiquedigest.com/articles/ethi0400.htm.
eBay makes money from taking a percentage of goods that are listed and sold. Two types of fees are involved: a nonrefundable listing fee and a Final Value Fee or closing fee. The seller agreement with eBay states that sellers have to sell to the highest bidder And your buyers agreement states that you agree to follow through with your bids. If you don't want to live by the rules than you don't have to join eBay.
Listing fees are nonrefundable, so if a high bidder backs out, the seller loses his listing fee. He suffers a monetary loss. Many buyers do not understand that the listing fee is nonrefundable. When a buyer backs out, the seller loses the listing fee, Opportunity cost (could have sold elsewhere), paperwork and transaction costs.
The problem is that the average eBay seller is not a large faceless corporate entity. He's a garage seller or small business trying to pay his mortgage and feed his children selling on the most cutthroat down and dirty market in the world.
If you want to "make an offer" by all means email sellers with offers and back out after you've accepted. But you click on the buy button on eBay, and you own it. You should know that some eBay sellers actually report buyers who renege to the credit bureaus.
I will stand by what was written in my previous article, but would agree that IF the seller doesn't state shipping and handling in his auction terms, and they are unreasonable, then that is grounds to back out of the transaction and not send payment. See eBay's policy on excessive shipping and handling at:
http://pages.ebay.com/help/policies/listing-shipping.html
To comment on this letter, post a message in the forums at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=6502
If you have a question you'd like Nick to consider for a future issue of "Dear Nick," send it to nick@auctionbytes.com.
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