‘Fair Warning “- 7 Legal Risks of E Auction


Online auction (or e auction), large enterprises and can catapult regional auction houses at international level with access to new and dynamic international markets.

Companies like eBay have added all kinds of auction capabilities to their websites to attract users and add excitement. But you run the auction – the auction held over the Internet – raises many legal issues for both the seller and the buyer

This article discusses ways to reduce the risk of the organization comes from adding tender. website. The data do not include legal advice and agencies consider online auctions should always seek expert.

1. What kind auction?

You might think that the auction is a sale where buyers offering the highest price for the stake and the collapse of the auctioneer’s hammer confirms contract. This Enska auction is the most common type, but there are others as well who carry their own legal risk and responsibility, including:

  • Vickrey auction – the highest bidder gets the item at the price offered by the next highest bidder
  • Dutch and Yankee auctions – auction formatted to handle situations where the seller wants to sell multiple identical items,
  • First-price sealed-bid auction – one offer is made by all the parties offer one the highest bidder wins and pays what they offer. The main difference between this and English auctions is that deals are not openly visible or advertised apposed to the competitive nature of which is generated by the public last
  • Reverse auctions – where the role of the buyer and seller are reversed. Many sellers compete to obtain business buyer and prices typically decrease over time as new deals are made. They are not typical auction format in that the buyer can see all offers and can choose what they would prefer. Reverse auctions are used mainly in the business context for shopping.
  • Bidding fee auction , or a penny auction requires customers to pay for bids, they can raise the auction price of one unit of currency one

2. Bidder terms and conditions

Sophisticated auction websites like eBay disclosed some policies cover a number of products intended for auction. Less complete pages will still have to bear the bidder terms and conditions include:

  • procedure that deals will be processed
  • how attractive deals will be handled
  • how winning bidders will be announced
  • using the “Reserve” will (be secret here that no bid is accepted); how disputes between bidders will be addressed
  • how merchandise and payments will be transferred
  • refund and return policies
  • information on fees, membership eligibility requirements and feedback system
  • the country’s jurisdiction and the law will apply.

They may also contain a list of prohibited items for potentially dangerous or illegal nature (eg, firearms, chemicals or fireworks). Some countries also prohibit certain products, such as France’s ban on the sale of Nazi memorabilia.

The European distance Directive shall not apply online auction as bidders working in private (rather than business) capacity not no right to cooling off period, as consumers generally make when buying products “at a distance”.

3. “Sales of goods – as shown in ‘

Offline, the items sold in the auction,” as shown. Companies are offering out of their own products (as opposed to just a platform for third party transactions) should be particularly aware of the legal issues to tender certain items can cause, such as rare wines that may be subject to pricing or shipping regulations. Similarly, although the company may be tempted to describe their products in auctions with glowing words to encourage bidding, they should keep in mind that all rules, regulations and laws that apply to traditional sales of products still apply.

4. Privacy

Most auction sites require users to both bidders and sellers, register before participating. The registration process usually involves collecting some user information, including name, address, telephone number, etc. auction owner should publish and adhere to the “privacy policy” on how it collects and uses user information online. This includes compliance with EU cookie rules EU Member States as well as the Data Protection.

Release rules have been improved in other countries, companies may want to limit participation in their own country. However, if you allow them in other countries to participate in online auctions, you must be aware of international privacy laws and regulations.

5. User

following the lead of eBay, many auction sites now provide a feedback system where records can provide the following business comments of other users. This user “response” is intended to keep the bidding process open and honest, and to allow customers to send their satisfaction or dissatisfaction with the vendor and its products. However, users have already become the basis of at least one libel lawsuit, where one car dealer sued the other, alleging that the defendant had posted false and defamatory feedback.

Companies should incorporate rules on the content of user communications on their website terms and conditions (not the same and offer terms and conditions) as well as expressly disclaim all liability and responsibility for user-provided content.

6. Website terms and conditions

website terms regulate the use of visitors to your website. It covers issues such as legal notices, ownership of intellectual property, use of hyperlinks and disclaimers.

A “click wrap” agreement requires the user to review the agreement and click “I Agree” or some similar wording before gaining access on site or features. Terms and conditions are generally available through a link at the bottom of the home page of the site and do not need to see or approval. While many companies choose to have terms and conditions rather than click wraps for more user-friendly nature, as between the two, the click wraps likely to be found to be enforceable in court.

7. Money

The high cash business, you need to take a zero tolerance attitude towards money. Not only will the regulators come down heavily on the organization does not have sufficient controls in place to prevent money laundering, but it also does not look good from a commercial and professional status.

And finally …

Release businesses tend to outsource online part of their operations to hosting companies like i-bidder. Not only does this ensure that knowledge and service is consistent, the auction company will also have access to a wider market as well as Internet savvy customers. All in all, a professional auction house will always ensure that customers have a safe and enjoyable browsing experience when bidding online.


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