June 8, 2006

eBay Home Sales

Posted in contracts, funny law, internet law, real estate at 8:55 am by thelawthoughts

This story, about Uri Geller (the spoon bending guy) buying Elvis Presley's old house, is intriguing.

After his bid, but before any documentation was signed, the house was sold to another party. Interestingly, an auction is not an offer for the purposes of offer and acceptance forming a binding contract. The bid is the offer. Accepting the bid is at the discretion of the vendor, despite what the auctioneer may tell you.

Whatever the outcome is in terms of contract law, I find eBay's reaction the most fascinating. Here is the money quote:

"The platform we provide in real estate really serves to generate interest," said eBay spokeswoman Catherine England. "It isn't a legally binding contract," she added.

Excuse me? An eBay sale is not a legally binding contract? So, are we just bidding on things in the hope somebody will send the product? At what point does a sale made on eBay become legally binding?

From my 236-odd experiences buying and selling on eBay, I have found that the bidder always transfers the money before the seller posts the item. What would happen if the $1mil odd sale price was deposited, then the vendor said, 'sorry, not a legally binding contract'. Could they sue for their money back?

I know they can in Equity, but what a hassle! Next time you are on eBay, watch what happens to people who renege, who effectively say 'it's not a binding contract'. Not pretty, I can assure you. It seems to me that everybody on eBay thinks it is a binding contract.

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1 Comment »

  1. Luke said,

    The housing section of eBay is witihin the confines of non-binding contracts, all other items except for business shares are within the confines of legally binding contracts.


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