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.