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Most are familiar with the massive online shopping website eBay, which connects buys and sellers in a massive online marketplace. eBay hosts more than 11 million product searches per hour and has more than 1 billion products listed at any time (Smith, 2019). Like many others I have used eBay for anything from collectible books to new car parts, you can even by a new car on eBay if you wanted. The way the website works is simple; you create an account and link your payment information and address, agree to their terms of service, and then begin your search for whatever it is you are looking for. Once you have found a product that interests you, you have the option of placing a bid and competing with other buyers or simply clicking the “buy it now” button which is normally more expensive but guarantees you the item. The question posed is whether or not placing a bid on an item enters the buyer and seller into a legally binding contract; one that legally requires the buyer to complete the purchase and the seller to be legally required to accept the payment and deliver the product to the buyer.
The textbook lists four elements to a contract; Agreement, Consideration, Contractual Capacity, and Legal Object (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2019, p 174). when biding on most commonplace items on eBay you are essentially entering into a contract with the seller because you are meeting all four of the contractual elements.
Agreement: During a purchase on eBay it is clear that both the seller “offeree” and the buyer “offeror” meet the agreement element of a contract. The seller takes great consideration when placing their item onto the website, they must take and post pictures, write a description, and set a minimum bid price. The buyer then battles with other buyers in an auctioned themed website where each member places their desired bid on the item, when another buyer outbids you, the website notifies you, allowing you to place another bid if you would like. Therefore, it is clear that each party is accepting the terms and neither party is entering into this contract without being forewarned and agreeing to the terms of the agreement and price set.
Consideration: The book describes consideration as “the bargained-for exchange” (Kubasek et al 2019, p 174). Meaning each party is getting something out of the deal. The seller is being paid for goods sold and the buyer is receiving that slightly used iPhone 6S as described. Should the seller fail to ship the iPhone or if the iPhone was actually a 5C then this would be a breach of contract because the buyer is not getting what he or she thought they were purchasing. Furthermore, the buyer would be in breach of contract if they had a case of buyer’s remorse, and suddenly decided they didn’t need a new iPhone and decided not to complete the purchase once they received the winning bid.
Contractual Capacity: Minors cannot enter into a legally binding contract, because they have not reached the age of consent which 18. eBay requires all of its users to create a unique account and accept their terms of use, which dictate you must be 18 years old in order to use their website. Ergo, the contractual capacity element has been met between the offeree and the offeror.
Legal Object: The final element of a legally binding contract simply dictates that the item or act in question must be legal in nature. eBay specifies in their terms of use that you cannot sell or attempt to purchase any illegal objects on their online marketplace, there is even a report button should you think an item for sale may violate the law.
As you can see a purchase on eBay clearly meets all the requirement for a valid contractual agreement between the buyer and seller. There are a few exceptions to this which eBay clearly states on their website. Such exceptions include the sale of land, automobiles and large purchases such as mobile homes or boats. So, keep that in mind next time you buy a new computer or slightly used toolset on the massive online auction site eBay.
References
- Kubasek, N. K., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. L. (2019). Dynamic business law: The essentials (3rd ed.). New York, NY: McGraw-Hill Education.
- Smith, C. (2019, January 21). 85 Amazing eBay Stats. Retrieved from https://expandedramblings.com/index.php/ebay-stats/2/
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