Using eBay to buy or sell stuff online? You’d better know your rights

By Dean I Weitzman, Esq. on October 27th, 2009

EBay.com is certainly a great place to buy and sell stuff online, from cars to motorcycles to toys and trinkets. But have you ever read all of the pages and pages of the “fine print” in your user agreement with eBay Inc.?  I bet you haven’t, and that creates a bit of a legal quandary for you.

Did you know that in that user agreement, it says that if you have an unresolved dispute with an eBay buyer or seller that it can be taken to court? Sounds good, doesn’t it?

Well, then just keep reading the fine print because that’s where you’ll learn that the court where your dispute can be heard is in Santa Clara County, Calif., not far from eBay’s headquarters. Oh, so you live in Philadelphia? Or Trenton? Or New Hope? Too bad, say the courts.

Image credit: © iStockphoto.com/DSGpro

Several federal courts recently have ruled that this stipulation in eBay’s user agreement is a reasonable part of the agreement, according to a story today in The Legal Intelligencer. The rulings from several federal judges have been similar — that the “forum selection clause” in the eBay user agreement is reasonable because it is in the document and that it is agreed to by the user when they click to accept the terms as part of their account with eBay. That clause is simple — it gives eBay the right to designate where the legal forum for any ongoing disputes will be heard. And that designated forum location is right there in Santa Clara County.

Several plaintiffs have tried to get federal judges to rule in their favor on the matter, arguing that they can’t even open an eBay account to be able to buy or sell items if they don’t agree to the user agreement. That’s not enough of a reason to invalidate the terms of the agreement, the judges have said. So the onus remains on the users if there is a legal dispute that has to be resolved through eBay.

So what does that mean for you? Does it mean you should stop using eBay and find a new place to buy and sell things? Probably not, since all other such sites have their own similar user agreements which likely have similar forum selection clauses. What it does mean, though, is that you should always carefully and fully read such fine print in any legal contract so that you know what your rights are before you enter into an agreement.

I had a problem on eBay a few years ago. I sold a used digital camera online for $1,200.  The buyer sent an electronic payment, eBay notified me that the money had been received, so I shipped the camera to the buyer.  Two days later, the payment was reversed by the buyer but my camera was already on its way.  A series of e-mails followed, with my demanding the camera or the money back.  The buyer sent me back the camera’s box, filled with dirt, instead of my camera.  I called eBay and they eventually helped me get it resolved.  But had I had to file a dispute in court, I would have had to travel to Santa Rosa County to fight my legal battle?  All for a $1,200 claim?  Probably not.

For eBay buyers and sellers embroiled in disputes, that’s really not fair, but it’s the way the courts have ruled so far.

Buyer beware may sound overly simple, but ultimately it is very good advice.