On 24 August 2016, the Federal Court of Justice (Bundesgerichtshof) dealt in a decision with the legal consequences of bids placed by the seller in the context of an internet auction on items offered for sale by himself in order to manipulate the course of the auction in his favour in this way.
The facts:
In June 2013, the defendant offered a used Golf 6 car for sale on the internet platform eBay by way of an internet auction with a starting price of € 1. This amount was offered by an unknown third-party bidder. The plaintiff was the only other third-party bidder to take part in the auction. He was repeatedly outbid by the defendant, who submitted his own bids via a second user account. According to the underlying general terms and conditions of eBay, such self-bids are inadmissible. At the end of the auction, the defendant's "highest bid" was € 17,000, so that the plaintiff could no longer win with his subsequent bid of the same amount.
The plaintiff is of the opinion that he bought the vehicle at an auction for € 1.50 - the next highest bidding step after € 1 - because he would have "won" the auction with a bid of this amount without the defendant's inadmissible own bids. After the defendant informed him that he had already sold the vehicle elsewhere, the plaintiff demanded damages in the amount of the market value of the vehicle, which he assumed to be at least € 16,500.
Course of the process:
The action for damages was successful at first instance. On appeal by the defendant, the Higher Regional Court amended the first instance judgment and dismissed the action (published in NJW-RR 2014, 1363 et seq.).
In doing so, the court of appeal assumed that a contract of sale for the used car at a price of € 17,000 had come into existence between the parties on the basis of the internet auction. In this respect, the last bid submitted by the plaintiff was decisive, even if the defendant had inadmissibly driven up the purchase price through his own legally invalid bids. As a result, the purchase price exceeded the market value of the vehicle, so that the plaintiff did not suffer any damage from the purchase contract itself and its non-fulfilment.
With his appeal, which was allowed by the court of appeal, the plaintiff seeks the restoration of the first instance judgement.
The decision of the Federal Supreme Court:
The VIII Civil Senate of the Federal Court of Justice, which is responsible, among other things, for the law of sales, first reaffirmed its case law. Civil Senate of the Federal Court of Justice first reaffirmed its case law that the conclusion of a contract in eBay auctions is not assessed according to § 156 BGB (auction), but according to the general rules of the conclusion of a contract (offer and acceptance, §§ 145 et seq. BGB). According to these rules, the offer declared by a seller in the context of an eBay auction is only directed to "another", i.e. to a bidder who is different from the defendant. Thus, the defendant could not conclude a contract from the outset through his own bids.
The present case is also characterised by the peculiarity that apart from the starting bid of € 1 and the plaintiff's bids, no other regular bid was submitted, so that the plaintiff was able to bid for the used car in dispute at the auction price of € 1.50. The court of appeal therefore reversed the decision and restored the decision of the Regional Court that upheld the action. The senate therefore set aside the appeal judgement and restored the decision of the Regional Court which, in the result, upheld the action.
In detail:
By starting the auction of the vehicle put up for sale with an initial price of € 1, the defendant made a binding offer of sale within the meaning of § 145 BGB, which was addressed to the bidder who would have made the highest bid at the end of the auction period. However, it already follows from the definition of offer contained in § 145 BGB - which also forms the basis of the contract conclusion mechanism provided for in the eBay GTC - that the conclusion of a contract must always be offered to "another". Consequently, the defendant could not bring about an effective conclusion of the contract from the outset with his own bids submitted via the additional user account.
The highest bid submitted at the time of the auction therefore came from the plaintiff. However, contrary to the opinion of the Court of Appeal, it did not amount to € 17,000, but only € 1.50. The plaintiff did not make a bid of € 17,000. Even though he repeatedly increased his numerous maximum bids to € 17,000, he did not make any declarations of acceptance based on the respective maximum bid and directed towards the conclusion of a corresponding purchase contract. Rather, the content of the declarations was limited to submitting the next highest bid in comparison to the existing bids of regular co-bidders in order to exceed these bids by the bidding increment specified by eBay in each case and thus to become or remain the highest bidder until the maximum amount specified by him was reached. However, after only one regular bid of € 1 had been placed on the used car apart from the defendant's own invalid bids, the plaintiff became the highest bidder with the next highest bid of € 1.50. The plaintiff's bids were not accepted.
The fact that the purchase contract was concluded for an amount far below the market value does not constitute an immorality of the purchase contract, since - as the senate has already decided in the past - it is precisely the attraction of an internet auction to be able to purchase the auction item at a "bargain price". The fact that the plaintiff was able to claim delivery of the vehicle for a rather symbolic purchase price of € 1.50 according to the auction result is solely based on the defendant's unsuccessful attempt to unfairly manipulate the auction process in his favour.
Judgment of the Federal Supreme Court of 24 August 2016 - VIII ZR 100/15
Lower courts:
Stuttgart Higher Regional Court - Judgment of 14 April 2015 - 12 U 153/14
LG Tübingen - Judgment of 26 September 2014 - 7 O 490/13
Source: Press release of the BGH
Goldberg Attorneys at Law 2016
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law
E-mail: info@goldberg.de
