Online Auctions Flashcards
What are the main applicable provisions
- Quality requirements under part 1 of the CRA 15
- Unfair terms under part 2 of the CRA
- Unfair Commercial Practices under UTR 2008
What is the problem with UK consumer protection for online auctions?
- There is no law specifically covering this method of concluding contracts between consumers and traders
- The CRA part 1 has some exceptions to public auctions
- There is no law specifically at EU level either, so it would be for national law to govern it - fragmentation and a lacuna in European consumer rights protection because France for example have it included in their legislation
Chelmsford Auctions v Poole - Lord Denning
On a sale in an auction there are 3 types of contracts
1) between the vendor (owner of the goods) and the purchaser (highest bidder to which the goods are knocked down)
2) Between the owner of the goods and the auctioneer - the vendor entrusts the auctioneer with the good until the auction
3) contract between the auctioneer and the highest bidder
However what is the problem with applying Chelmsford Auctions v Poole to eBay for example?
Terms and conditions on eBay website states that it is not an auctioneer.
- the site is instead a venue which allows registered users to offer sell and buy just about anything which is legal at any time, from anywhere in a variety of price formats
- they say they don’t take part in the transactions so they act different to traditional positions in a public auction
- don’t have possession of goods so just an instrument put together for the people who want to buy and sell
So what can we apply if we cannot apply denning in Chelmsford Auctions v Poole
It occurs online so we are under the field of the CCI at distance selling - yet this is a minimalist instrument
- definition under CCI regulation 5 = “public auction” means a method of sale where goods or services are offered by a trader to consumers through a transparent, competitive bidding procedure run by an auctioneer b) consumers attend or are given opportunity to attend and c) successful bidder bound in a contract to purchase the goods or services
So can we use the CCI?
No - definition doesn’t fit to online auctions = no instruments
What do we do then?
We use the 3 parties involved and see whether we can apply any of the consumer rules to them
1) consumer / seller
2) seller / online auctioneer
3) online auctioneer / consumer
1) consumer / seller
Sale of goods? In the CRA
- however these online auctions websites are set up for consumers to sell and buy products =
The CRA will ONLY apply if a trader is using the website in the course of business to SELL to consumers
2) Seller / online auctioneer
- liability for hosted content?
- problem is that there is no contractual agreement for possession of the goods by the online auctioneer
- however eBay host the information which is being stored to enable the transactions
- is there then liability if someone tries to sell something illegal on it?
- this approach would be problematic for such huge websites that host billions of peoples’ content
There is the e-commerce directive which removes liability for eBay for hosted content - eBay and Rolex case: German Supreme Court - vendor selling fake Rolex’s on eBay, despite the ecommerce directive and the lack of liability for eBay, they are under a duty when someone informs them of an infringement of the terms
3) Online Auctioneer / consumer
- trader and a consumer: unfair terms under the CRA part 2?
- have to apply rules of unfairness
- eBay France v DWC (B2B) motorcycles on eBay, the contract was full of unfair terms between the seller and the consumer, he got very negative feedback on eBay but somehow managed to change the feedback to positive - when eBay found out they suspended his account. Made a new one which was then again suspended - sued eBay
= the term allowing eBay to suspend accounts was fine because they detected that it was not arbritrary and there was an infringement by DWC acting illegally HOWEVER there was a problem because it was B2B business to business case so couldn’t apply CRA
if it was a CONSUMER might have been different
Right to suspend the account of the used
CRA Schedule 2, 7:A
- unilateral change in terms and conditions CRA schedule 1, 11A but also see schedule 2, 7
- also see CRA schedule 2, 13
Hyperlinking
CRAscedule 2, 10
- instead of directly saying the new T&Cs of a contract they send a hyperlink - could be against unfair terms but generally used very much
- not clear whether it’s between trader or consumer
Enforcement
Public enforcement would be better because private redress to take eBay to court would be lengthy and costly compared to the value of the harm caused to the consumer and consumer could just close down account if didntnlike the terms and conditions of the website
