Q: I buy and sell items online. A couple of times I haven’t received what I paid for, but they’ve been small items and I haven’t been worried. Other times, buyers have complained to me about what they bought. Are these legal contracts?
A: Generally, yes they are. Most people deal with one of the online companies to buy and sell items and there are companies that facilitate a secure payment system, so a buyer doesn’t have to supply a credit card number online. These have become more popular as people worry about identity theft.
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These are contracts and legally enforceable.
The basic concept of a sales contract is simple: you want to sell, I want to buy and we agree on a price. I pay you, and you give me the item.
However, jurisdictional issues complicate transactions that occur online. Where was the contract formed? You may be buying something from someone residing in the United States, Europe or China. Which country’s laws govern? There are no easy answers to these questions.
One answer is to look at the contract with your sales provider. Entities such as EBay and PayPal have contracts that set the terms under which their service is used. If you are unhappy, can you sue? Maybe, but where? Also, are you contractually prevented from doing so?
Here’s an example. You buy something online but are unsatisfied. The item you bought is the wrong colour or size, is not in the same condition as advertised or is not exactly as shown.
You can complain to the online service or payment company but they will often refer you to the seller. These companies have been creative in insulating themselves from liability by use of good wording in their contracts or user agreements.
You say you can’t recall agreeing to such a thing? Let me assure you, you will have clicked on a box marked “I agree” when signing up to use these electronic sales or payment services. If you hadn’t agreed, you wouldn’t be using them. These companies keep track of this, as they are entitled to do.
If you contact the auction company, I can virtually guarantee it will point to a contractual term saying you have to sue them in their home jurisdiction, which is probably going to be in California or Texas. Not too helpful if you’re from Brooks, Alta.
Also, there will be a clause calling for arbitration instead of court action, again to occur in the United States and likely under the auspices of that country’s National Arbitration Forum.
These companies will point out that if you don’t voluntarily abandon legal action, they will make an application to have it dismissed and seek all their legal fees against you. They don’t use cheap lawyers.
Most people go away at this point and the companies accomplish what they wished for.
There has been an interesting glitch in these agreements, in that declaratory relief was not ousted by the arbitration clause. In English, this means that you may be able to sue if you sue only for a court declaration that something wasn’t delivered, either at all or in proper shape. The arbitration will go substantially better if you are armed with a judgment in your favour and you may in fact receive a settlement.
However, all of this is expensive and time consuming. Your best bet is to check out the seller in as many ways as you can, and try to ensure you are dealing only with reliable people.
Geography is also a factor, which should be combined with common sense. Spend only the money you can afford to lose in these online auctions. The auctions themselves tell you to be careful, which is good advice. Follow it.
Rick Danyliuk is a lawyer with McDougall Gauley LLP in Saskatoon.
