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

No primary category set

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.

13 Responses

  1. 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.

  2. 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)

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

  4. 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



eBay UK Seller Release Spring 2019 – Mandatory Good ‘Til Cancelled Listings


Will eBay force sellers to use eBay GTC and scrap short listing durations?


A bid is a legally binding contract
(even when it’s £180,000)

Business man signing contract, making a deal.

Drawing up a web design contract


Etsy streamline purchasing with guest checkout and buy it now

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.


Take a look through a selection of the latest articles on ChannelX

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars