Australian judge rules that sales via auction website are a legally-binding transaction

eBay sales legally binding

An Australian ruling concerning the sale of a vintage plane could have worldwide ramifications for the online auction site and its users after a judge ruled that a sale on eBay is a legally binding contract.

The case, which reached the NSW Supreme Court, saw eBay buyer Peter Smythe sue Vin Thomas after he changed his mind about selling the 1946 World War II Wirraway aircraft.

Thomas, it transpired, had agreed to sell the aircraft to someone else for $250,000 (£105,000) in a transaction outside of eBay, but at the last moment received a bid equal to the auction’s reserve price of $150,000 (£63,300) from Smythe via the site.

Acting judge Nigel Rein ruled against Thomas and ordered him to hand over the aircraft for the price agreed on eBay with Smythe.

"It follows that, in my view, a binding contract was formed between the plaintiff and the defendent and that it should be specifically enforced," Justice Rein said in his decision.

"It has always been our understanding that you are entering into a binding contract when you are listing an item and someone has made a bid on the item," said eBay spokesman Daniel Feiler.

It is currently unclear what impact, if any this could have on international sales.

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