eBay and business law.

• in accordance with the description you have given in the item listing;
• of satisfactory quality; and
• fit for their purpose.

Goods are of satisfactory quality if they reach the standard that a reasonable person would regard as satisfactory, taking into account the price and the item description. Indications of quality include fitness for purpose, freedom from defects, appearance and finish, durability and safety. It is the seller, not the manufacturer, who is responsible for the goods.”

•  Consumers’ legal rights to goods under the Sale of Goods Act 1979

When consumers purchase goods from a trader, such as shops, high street stores, market, etc, they enter into a sales contract with the trader. Under the English Law relating to the sale of goods, which is governed by the Sale of Goods Act 1979(hereafter referred to as the SGA 1979). Goods are defined as “all personal chattels other than things in action or money”.The law gives consumers certain key legal rights in sales of contracts. On the other hand, the SGA 1979 is one of the most important laws regulating the seller’s legal obligations on eBay.co.uk in the course of a business. .

• Once the sales contract between the buyer and goods seller is concluded, the seller must comply with his contractual obligations under the SGA 1979, many consumers however complain that the goods received from goods supplier are not accordance with the description of the seller displayed on the listing site. In this situation, the buyer’s right is affected against the seller’s defective performance. Consequently, the goods must match the descriptioncomplied with terms and conditions given in the item listing, which is an implied condition in the sales contract. If the goods supplied do not in accordance with the seller’s description, the eBay buyer is entitled to reject the goods and claim from the seller damages for their non-delivery.

• Secondly, if the seller sells goods in the course of business, there is an implied term that the goods will be of satisfactory quality (section 14(2)).The indications of quality include fitness for purpose, appearance and finish, freedom from defects, safety and durability. (S14(2B)).As a result, if the goods supplied are not of satisfactory, the sell is in breach of condition and the buyer has the right to reject the goods and claim refund from the seller.

• Under the SGA 1979, the consumer has these primary rights against the goods of supplier even the goods are purchased in stores or on eBay website. It should bear in mind that it is the seller’s responsibility for the goods, not the manufacturer.

• EBay’s Item not received and or Significantly Not as Described Policy requires the seller to delivery goods they have sold on eBay and received payment for. If the seller fails to do so or sent goods to the buyer who later found that they are ‘significantly not as described’ by the seller on items listing, eBay company may restrict the seller’s account and suspension. EBay will enforce law authorities to penalize seller’s fraud. Further, the buyer may be eligible for reimbursement through eBay’s Standard Purchase Protection Programme..

   

       

Using eBay

“You may not use the Site if you are under the age of 18 or you are not able to form legally binding contracts, or if your eBay membership has been suspended.

While using the Site, you will not:

• post, list or upload content or items in inappropriate categories or areas on the Site;
• breach any laws, sell any counterfeit items or otherwise infringe the copyright, trade mark or other rights of third parties;
• breach our policies, including, without limitation, the  policy and the other policies linked to from the "Additional terms" section below;
• fail to pay for items purchased by you, unless the seller materially changes the item's description after you place a bid on the item, a clear typographical error is made, or you cannot authenticate the seller's identity;
• fail to deliver items purchased from you, unless the buyer fails to meet your listing terms, or you cannot authenticate the buyer's identity;
• manipulate the price of any item or interfere with other users' listings;
• circumvent or manipulate eBay’s fee structure, the billing process, or fees owed to eBay;
• post, list or upload false, inaccurate, misleading or defamatory content (including personal information);
• take any action that may undermine the feedback or ratings systems (such as displaying feedback information on, or exporting feedback information to, non-eBay sites, or using it for purposes unrelated to eBay);
• transfer your eBay account (including feedback) and User ID to another party without our express consent;
• distribute or post spam, chain letters, or pyramid schemes;
• distribute viruses or any other technologies that may harm eBay, or the interests or property of eBay users;
• copy, modify, or distribute eBay's copyrighted works or trade marks, or other content from the Site, without our express consent; or
• harvest or otherwise collect information about users, including email addresses, without their express consent.

If you are registering with eBay as a business entity, you represent that you have the authority to legally bind that entity. If you are trading as a business on eBay, you must comply with all applicable laws relating to online trading (please see our  page for further information).”

• Under common law, an offer is a statement by one party of a willingness to enter into a contract with the other party on stated terms, and in turn, if the other party accepts it, the agreement will be legally binding. English contract law does not require an offer is made in a particular form. Thus, offers can be made by distant communications such as fax, e-mail and World Wide Web. However, it is necessary to observe the distinction between an offer and an invitation to treat. Invitations to treat are advertisements where merchants promote the sale of products. English law holds that shop displays goods and price listed are invitations to treat. After the offer has been made, the offerer can choose to accept the offer to buy or refuse. If the acceptance of an offer is made, a contract is then entered into Acceptance is the unconditional agreement to the presented offer. The general rule is that an acceptance must be communicated to the offeror, but there is no any rule as to which methods of acceptance. Thus, acceptances can generally be made via any communication methods unless the term of the offer has been explicitly specified. In the context of creating contracts online, electronic mail has become a more faster and reliable communication method used as for the negotiation as to terms or other questions relating to the contract between parties. Moreover, an e-mail can also amount to a valid acceptance for any offer that required to be made in writing.  
• As traditional contract law is applied in online contracts, thus the display of goods with a price by sellers on eBay are merely an invitation to treat so that to attract consumers who are interested in these goods to make an offer to buy through bidding the goods. The offer therefore is made by the buyer, not goods supplier. After the offer has been made, the supplier can either accept or refuse the offer. Usually, the highest bidder will be accepted by the seller at the end of auction. The seller must communicate to the ‘winner’ that he is going to accept it and negotiate further delivery and payment method, it cannot be a message merely notify the offeror that the offer has been received. Although the seller can communicate to the buyer via any communication method, in the situation on eBay, the acceptance of the offer is usually through an email from the seller via eBay as a confirm letter arranging delivery and payment method. As a result, both parties then enter into a binding contract once goods supplier send an e-mail as the acceptance to the buyer.

Using eBay

“We will commence supplying our services to you as soon as you accept this User Agreement. Unless you and eBay agree otherwise, you will not be able to cancel this User Agreement under the Consumer Protection (Distance Selling) Regulations 2000 (or any equivalent legislation in your jurisdiction) once the supply of the services has commenced.”

• Consumer’s extra rights when buying goods on the internet under the Consumer Protection (Distance Selling) Regulations 2000 and Electronic Commerce (EC Directive) Regulations 2000
• The one fundamental difference between online sales contracts and offline contracts is that the online contract is a no face to face contract between the seller and the consumer. Unlike buying goods in shops, where sales contracts are made face to fact that the consumer is not worried about a trader’ identification. Moreover, a consumer is able to know there is little risk of non-performance or defective performances from a trade as consumers have opportunity to exam the goods before and even after purchase of the goods in shops or later at home, if they are not satisfied the goods, buyer has rights to return goods immediately or in a reasonable time, the refund will be given subsequently. Therefore, the Distance Selling regulation is an important area of law which is to be contrasted with purchases in a shop.
• The regulations only applies Business-to-Consumer communications, so that the transaction between Business-to-Business is not covered by this regulations. Moreover, although the regulations do not apply to internet auction sales, but this only refers to traditional auctions carried out via the internet, not sales made on eBay’s auction-styling selling format. Thus, any sales contract made via eBay.co.uk is formed as normal sales contract concluded via the internet and covered by the Distance Selling Regulations 2000.

    Accepted Payments Policy

“eBay wants to help ensure that the marketplace offers buyers safer online payment choices. As described in our safe buying guide, eBay strongly encourages sellers to offer payments through PayPal. PayPal is convenient to use and has privacy built in.

From time to time, as new payment services arise, we will evaluate them to determine whether they are appropriate for the marketplace. Payment services that are not permitted on eBay may in fact be outstanding services for consumers in other contexts. eBay's evaluations relate only to whether a particular service is appropriate for the eBay marketplace. We will consider the following factors, among others, in making this decision:

• Whether the payment model offers substantial financial, privacy and anti-fraud protection for buyers and sellers
• Whether the payment model raises the potential for confusion among eBay members, or involves incentives that may present fraud concerns
• Whether the payment model involves precious metals, or other non-cash (points, miles, minutes, vouchers/coupons, discounts) as consideration
• Whether the payment service has a substantial historical track record of providing safe and reliable financial and/or banking related services (new services without such a track record generally cannot be promoted on eBay)
• The identity, background and other business interests of the payment service sponsor
• The licence/regulatory status of the payment provider in the countries where it provides payment services

Some offline payment methods, such as personal cheques, may not offer the same level of protection or convenience as online payments. These methods may be appropriate for certain types of transactions and sellers may offer to accept most valid financial instruments including personal cheques, cashier’s cheques, postal orders, or Cash on Collections (COC).”

• In the paper-based contract of sales, standard terms and conditions will specify the specific payment and delivery terms of the transactions. It also the same in electronic contracts, in which online payment methods are compulsory.
• The security of payment has become one of the top issues among consumers; many of them are not willing to use the Internet to purchase goods because of concerns of card fraudulently used by other people. Unlike we purchase goods in stores, where the consideration for a sales contract can take payment of cash, by which no risk will be occurred. Even consumers use a card as a payment, the signature of card holders and password input can fully protect consumers’ right in case of fraud. In the e-commerce transactions, for example, via eBay.co.uk, payment with card is the most common method as both consumers and the business are reluctant to use cash payment. The traditional view is that cash lost in the post constituted non-payment..Thus, in order to satisfy the payment terms of the contract, the other part receives the payment. Applying this rule to e-transaction, digital cash becomes lost en route to the online merchant does not constitute payment either.  In addition, a merchant could even keep the cash and claim non-payment from the buyer.
• As a result, people rarely ever sent cash trough the mail, the risk of payment involved in the e-transaction left to the use of credit card. Most of businesses in Ebay.co.uk accept t credit payment, which mean we could purchase goods by a card via the internet. Thus, a credit agreement is required. A consumer enters into a credit agreement with the business is generally protected by the Consumer Credit Act 1974(CCA 1974)
• The Consumer Credit Act 1974 establishes for the protection of consumer credit and consumer hire agreements for amounts up to £25,000. Its protections apply to “agreements between traders and individuals, sole traders, partnerships and unincorporated associations, but not agreements made between traders and corporate bodies such as limited companies.” Therefore, under the section 75 of the Act 1974, a card holder(debtor) is able to make claim against both the card issuer(creditor) and supplier for breach the contract or misrepresentation provided the agreement is falling with section (b) and (c) But it should bear in mind that this section only available for credit card holders.
• Protection on card payment is also realised in the Distance selling Regulation 2000 for distance contracts. The directive provides that where there is fraudulently use of the card, the cardholder will have no liability.Although section 84 of the UK CCA 1974 removes any liability of the debtor under a regulated consumer credit agreement where there credit card is used by another person not acting as their agent(fraudulent use), but the cardholder may be made liable to the extent of 50 pounds where the card is out of the possession of an authorized person in the case of card lost or stolen. However, Regulation 21(5) of the directive does not apply part of Section 84 of the Act, that is to say the cardholder will even no liable for 50 pounds; it is changed for distance contracts.

Conclusion

As far as English law concerned, the general rule of contract together with any relevant consumer protection legislations will apply to contracts entered into via the internet. Therefore, four elements (offer, acceptance, consideration and intention to create relation) of requirements of making a legal binding contract are also necessary for forming online contracts. As a result, the legal relationship between eBay seller and buyer is created on the eBay where the sales contract is concluded that goods supplier accept the highest bidding buyer. However, regarding the creation of legal relationship between eBay and eBay users, the contract is given effective when users agree the terms and conditions contained on web-page through users’ clicking the icon button, which is a new way for consumers or users to consent to the click-wrap agreement or contract.

Furthermore, it is getting popular that many of us nowadays buy goods on the internet, which gives us a chance to enjoy time saving and variety of goods rather than shopping in shops. However, the law recognizes that this sort of distant shopping comes with its own problems. Therefore, in addition to give consumer’s legal rights as on the internet as in shops, some law legislations and regulations are come into force in the UK giving consumers’ extra legal rights to be fully protected. So far, there are two keys of Regulations (Directives) are implemented to protect consumers: the Consumer Protection (Distance Selling) Regulations 2000 and Electronic Commerce (EC Directive)Regulations 2002. As a result, consumers’ legal rights from purchasing goods on the internet are extended and much more than shopping in stores.

BIBLIOGRAPHY

Business Law Module Booklet

Paul Richards, Law of  Contract, (7 th edition), Longman, 2006

Susan Singleton, Ecommerce: A practical guide to the law(2001),by Gower Publishing Company

Chris Reed and John Angel, Computer Law(5th edition), Oxford University Press

M Chissick & A Kelman, Electronic Commerce – Law and Practice, Sweet and Maxwell, London

Evan Mckendrick, Contract Law (4th edition), Published by Palgrave

Milena Hertell (2001), E-Commerce and the Law, Published by Cavendish Publishing Limited.

Other resources from below websites:

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