Guy wins GTR on eBay, dealer refuses to honor price. Oops.

[redkow97]

Only applies if there is a reserve if no reserve is selected on eBay then the highest bidder wins. The seller would almost undoubtly lose in court. The terms of the auction have to be presented before bids are taken. I've watched many classic car auctions and they state high bid wins no reserve or however they put it. You can't have a no reserve auction, allow the auction to end and then renig. No reserve means highest bidder wins!

Is there case law to support this? I'm sure there's an eBay case out there somewhere, but I'm too lazy to look.

I would agree with you that eBay rules are different than "real world" rules though. The seller has an independent contract with eBay. In a no reserve auction, I believe that essentially means that the property is turned over to eBay BEFORE the auction ever begins. There is no actual delivery, but eBay has the sole and complete rights to sell the item at that point.

The legal problems start popping up when you get to venue. What state's laws apply? The state where the seller resides? The state where the buyer resides? The state where eBay is headquartered? The state where the transaction took place? Everything was online - where did that sale happen?

These are all questions that will be HOTLY debated if there were actually a contract dispute. Depending on which state's laws are most favorable to each party, they'll all be arguing for different venue.

The practical reality has already been established: The dealer will eat their mistake because the public backlash would cost them a lot more than even giving away a free car.

But frankly, I think that's a "just" outcome. In contract law, mistakes are generally construed against the party who drafted the contract. In this instance, the dealership was the party that failed to enter a reserve amount. Not the seller's fault.

The selling price wasn't ridiculous or unreasonable either, so a mythical "reasonably prudent person" would have no problem thinking that the purchase price was okay (especially if they argued that the buyer didn't know much about GT-R's).

[wht_scorpion]

He has a weeks to pull the auction on ebay. What he think it yahoo auction. Called proof reading before posting on Ebay I would have alot of people buy thing from them but dont send the money and just tag him with bad feed back.

[John]

It's a binding contract on Ebay for the seller once they list the auction at without a reserve that whatever it sells for is the price. The same way that when the bidder submits a bid, that is a binding contract that he has just effectively signed. The ebay user agreement clearly states that unless a reserve has been placed on the item, then it is sold at the price the auction ends at.

not on ebay motors. bids on cars are NOT binding on ebay. read the user agreement.

also, the dealer said he will honor it.

UPDATE: Honda San Marcos owner Randall Ammons returned our request for a comment. Ammons told us that the dealership plans on honoring the agreed upon eBay auction price. Ammons said over the phone, “Bottom line, the person who listed it did so incorrectly; that’s our fault.” Ammons continued, “We spent years getting a great reputation, and a deal’s a deal, we’re going to honor it.” Ammons said they’ve contacted Vang and are currently waiting to hear back from him.

http://wot.motortrend.com/gt-r-for-55100-dealer-latest-to-refuse-to-honor-ebay-auction-105645.html#ixzz1UdJw6EKK

Edited August 10, 2011 by John

[John]

and I'd sue him for slander if he went around the net slandering my business.

good luck. its only slander if its not true.

[tyler524]

The only reason they will honor it though is because of the shit storm for them online. pretty dumb for the dealership to not just sell the car for $3900 less than they wanted and be done with it. They should be happy they only had a 4k mistake instead of 10 or 20k.

[John]

maybe maybe not... we weren't there for the conversation with the GM, so we will never know for sure.

but they didnt have to honor it, as its a non binding auction.

[tyler524]

maybe maybe not... we weren't there for the conversation with the GM, so we will never know for sure.

but they didnt have to honor it, as its a non binding auction.

There are multiple cases out there already of the exact same situation where the dealer has lost everytime. To me, that would mean that they are actually required to honor the price, pay him damages in the price difference to what a similar one would cost, or find him another similar car and sell it to him for the price set in the auction.

[Scruit]

There are multiple cases out there already of the exact same situation where the dealer has lost everytime. To me, that would mean that they are actually required to honor the price, pay him damages in the price difference to what a similar one would cost, or find him another similar car and sell it to him for the price set in the auction.

Cites?

[Cheech]

Cites?

For realz, I'd love to see this. Pay him damages from the agreed/actual price difference? Find him a similar car? Something seems off.

You either do the deal or you don't. Damages implies there was damage done to the plaintiff, there wasn't any damage done for his failure to buy something.

[John]

There are multiple cases out there already of the exact same situation where the dealer has lost everytime. To me, that would mean that they are actually required to honor the price, pay him damages in the price difference to what a similar one would cost, or find him another similar car and sell it to him for the price set in the auction.

neither party is required to do ANYTHING.

thats the very definition of non-binding.

[Scruit]

For realz, I'd love to see this. Pay him damages from the agreed/actual price difference? Find him a similar car? Something seems off.

You either do the deal or you don't. Damages implies there was damage done to the plaintiff, there wasn't any damage done for his failure to buy something.

If you are contractually obligated to complete a sale then the person who breaks that contract is liable in a tort action IF the other person suffers damages as a result.

If I enter into contract to buy a used car and the seller spends money prepping the car for me and then I back out then the seller can recover damages. He would have to prove that he lost money that he cannot recover from a future sale, for example if I asked him to have smoke smell removed from the car, or install an accessory.

If the seller pulls out *of a contract* then they buyer can be entitled to damages, such as the extra money it costs to buy a similar vehicle. The dealership should be happy they only lost $3900 because IF the contract was binding then the buyer could have run out and paid full market value for an identical car and sued the seller for the difference between the auction price and the cost of the identical car.

I knew a guy who was trying to buy a house. He signed a contract stating that he'd buy the house if items X Y and Z were fixed, and the offer was valid for X days. The seller fixed the items but there was dispute over whether they actually responded to him before the offer expired. He refused to buy the house and was sued by the seller for the cost of the repairs he requested, plus the difference in value between his offer and the eventual selling price. He lost and was was out $30k

Edited August 10, 2011 by Scruit

[Scruit]

John, and any others that have stated the same, are correct...

http://pages.ebay.com/help/policies/non-binding-bid.html

All bids made in the Real Estate and eBay Motors vehicles categories are considered non-binding.

The dealer owes him nothing, and it is only their reputation that is at risk.

Having said that, the ebay guidelines specifically state what is not allowed, inlcuding:

- Backing out of the transaction because buyers didn't place a high enough bid and the seller didn't add a reserve price

However, this is an ebay policy and their only recourse is action taken against the ebay account, such as suspension or closure.

Completing the sale (at a loss) was the right thing to do, but was not enforceable.

[GESEXER]

it doesn't matter. in a auction the seller doesn't have to sell it for what you won the bid for.

that's just how it is.

now they might be able to dispute it if he met the reserve. but i still don't think they can make him sell it.

bid, bid, bid anyone else, going once, going twice, SOLD. Thats how an auction works. They will not take the final bid if reserve wasnt met.

[Scruit]

bid, bid, bid anyone else, going once, going twice, SOLD. Thats how an auction works. They will not take the final bid if reserve wasnt met.

But if there was no reserve then the sale is final. Depending on if the auction creates a binding contract.

[Carwhore]

100% serious.

go to a car auction sometime. if the bids don't meet what the seller wants, no one wins the auction even if you were the highest bidder.

often the seller isn't even there and the auction house calls the seller to see if they will accept the bid or not. just because you beat everyone else bidding on it doesn't mean you automatically own the car.

when you "win" the bidding, the auctioneer will say your bid price and say "with an if".

that's what made me laugh when I read his thead and said something about consumer protection stuff. he's obviously new to auctions.

I wouldn't cave to him no matter what he did. and I'd sue him for slander if he went around the net slandering my business.

not ever car won is won on an if. But yes, dealers have reserves and don't have to sell the vehicle at an auto auction.

[Carwhore]

Buddy, I think you don't know auctions.

he's correct.

[Scruit]

http://www.law.cornell.edu/ucc/2/article2.htm#s2-712

§ 2-712. "Cover"; Buyer's Procurement of Substitute Goods.

(1) If the seller wrongfully fails to deliver or repudiates or the buyer rightfully rejects or justifiably revokes acceptance, the buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

(2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (Section 2-715), but less expenses saved in consequence of the seller's breach.

(3) Failure of the buyer to effect cover within this section does not bar him from any other remedy.

[Scruit]

http://www.mecum.com/pdf/forms/sample_seller_forms.PDF

The contract at this place (which I'm sure you've all heard of) states that any car listed with a reserve price shall be sold to the highest bidder once it has met that price. The seller may choose to LOWER the reserve price during the bidding but may not RAISE it. No-reserve auctions sell to the highest bidder regardless of price.

If either the buyer or the seller refuse to complete the sale then the defaulting party pays Mecum's comission (12% of sale price?) and other fees.

You'd have to check state law to see if there are specific rules for auctions.

[tyler524]

Cites?

I can't get back to the 350z forums at work right now but through the pages there were about 4 others cases like this cited. I beleive one was for a Challenger, an M3 but the dealer in that case gave in after bad publicity, a G35, and I forget what else.

[Scruit]

I can't get back to the 350z forums at work right now but through the pages there were about 4 others cases like this cited. I beleive one was for a Challenger, an M3 but the dealer in that case gave in after bad publicity, a G35, and I forget what else.

Negative publicity is a powerful motivator.

[serpentracer]

Serpent, you're an idiot. Go watch auction kings, fag.

first that's pretty much a fictional tv show. just like all the storage auction shows. and they're not selling cars. key difference.

I've probably been to more auctions than you've seen on tv.

Oki, adessa, Manheim, west harrison auto auctions just to name a few.

all of these are a weekly basis. my buddy owns a used car lot...where do you think we went to every single day?

Edited August 11, 2011 by serpentracer

[serpentracer]

here's OKI auto auctions guidlines on IF's.

IF" Sales

All "IF" sales are binding for one hour after the auction ends. Bid price approval after the hour is binding to the Buyer if the buyer has not declined the sale. It is the Buyer's responsibility to check with the Auction on the status of the "IF" bid. As long as the Seller has approved the "IF" bid within an hour or before the buyer declines the sale, the sale is valid and binding to the Buyer. All "IF Turndowns" must be processed through the arbitration department.

http://www.okiautoauction.com/gp.asp

the seller has the right to refuse to sell the car at a real auction.

Edited August 12, 2011 by serpentracer

[serpentracer]

here is adesa's guidlines about IF's.

be consummated and final when the auctioneer calls out

the Buyer’s bid badge number and the block clerk records

that sale and all of the specific terms thereof.

Notwithstanding the above, “if” sales shall be final and

binding only when the highest bid is accepted by the Seller

and recorded or a subsequent offer or counteroffer is

accepted and recorded.

#4... http://images.adesa.com/publicweb/dealerregforms/US_Auction_Policy_EN.pdf

Again, these are real auctions. now you can clearly see I'm not an idiot and I know what I'm talking about. all you little smart asses can go suck a fat cock.

Edited August 12, 2011 by serpentracer

[Rootney]

here is adesa's guidlines about IF's.

be consummated and final when the auctioneer calls out

the Buyer’s bid badge number and the block clerk records

that sale and all of the specific terms thereof.

Notwithstanding the above, “if” sales shall be final and

binding only when the highest bid is accepted by the Seller

and recorded or a subsequent offer or counteroffer is

accepted and recorded.

#4... http://images.adesa.com/publicweb/dealerregforms/US_Auction_Policy_EN.pdf

Again, these are real auctions. now you can clearly see I'm not an idiot and I know what I'm talking about. all you little smart asses can go suck a fat cock.

You have been to a couple auctions and now you are an expert. NOT!

I am a licensed dealer and you don't know what your talking about. You are comparing two completely different types of sales at real auctions. If the ebay seller did not have a reserve it is just like selling a car at auction with NO reserve. If I run a car through any reputable auction as NO RESERVE and it brings a bid of any amount, it is SOLD to the highest bidder. Good luck trying to get out of a deal that was run as NO RESERVE. It won't happen.

An "if" sale only applies if the seller has set a reserve price on the vehicle. Since the ebay sale was NO RESERVE you cannot compare it to an "IF" sale at a real auction. You should really get your facts straight before you start name calling and telling people to suck cock.

Edited August 12, 2011 by Rootney

[Scruit]

You have been to a couple auctions and now you are an expert. NOT!

I am a licensed dealer and you don't know what your talking about. You are comparing two completely different types of sales at real auctions. If the ebay seller did not have a reserve it is just like selling a car at auction with NO reserve. If I run a car through any reputable auction as NO RESERVE and it brings a bid of any amount, it is SOLD to the highest bidder. Good luck trying to get out of a deal that was run as NO RESERVE. It won't happen.

An "if" sale only applies if the seller has set a reserve price on the vehicle. Since the ebay sale was NO RESERVE you cannot compare it to an "IF" sale at a real auction. You should really get your facts straight before you start name calling and telling people to suck cock.

Am I right in thinking that an "if" sale refers to a reserve auction where the highest bid is below the reserve price, and the seller has the option of accepting the lower-than-reserve-price IF he chooses?

Still, eBay Motors terms specifically state that auto auctions are non-binding (due to the complexity of some states' buying/selling laws, especially when the buyer and seller are in different states), so at the end of the day it was only reputation that was on the line.

I always believed that auctions were binding as long as the highest bid was above the reserve price, or the was no reserve price.