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Online Contracts - eBay auction is binding |
In a recent case following a sale on eBay, the judge ordered that an auction for a Wirraway Warbird aircraft for the reserve price of $150,000 was binding on the vendor. The vendor had also offered the aircraft via the eBay 'Buy now' button for $275,000. |
The aircraft had attracted no bids until 20 seconds before the end of the auction period, when a bid for $150,000 was made. |
The prospective purchaser wanted to go ahead with the transaction, but the vendor was not happy with it and the matter ended up in court. |
The vendor said he had had another expression of interest for $220,000 and argued that the eBay auction was no more than an invitation to treat. He also argued that any agreements which might have existed were between each party and eBay, not between the vendor and purchaser directly. |
The vendor was clearly trying to get the best price he could for his rare aircraft from several avenues. The problem for him was that one of them was eBay and he had conducted an online auction. |
The judge said the auction was an ordinary auction, albeit without an auctioneer (eBay claims not to be one) or a gavel. It had a method of ending the auction and it created a binding agreement, although in a non-traditional fashion. |
