On 12 November 2014, the German Federal High Court (BGH) ruled that a sales contract for a used car concluded on the internet platform eBay was valid, even though the seller ended the listing early when the buyer’s initial offer of EUR 1 remained the highest bid (BGH VIII ZR 41/14). As the defendant (the seller) subsequently sold the car elsewhere, the BGH granted the plaintiff (the buyer) damages amounting to the lost profit (the value of the car minus the bid of EUR 1). In another decision dated 10 December 2014, the BGH confirmed the aforementioned decision and granted the plaintiff damages after the defendant had ended the eBay listing of a power generator early and had sold it elsewhere (VIII ZR 90/14).
The facts of the cases were as follows:
The BGH ruled in the first case that in the course of an internet auction, a gross disparity between the maximum offer of the potential purchaser and the actual value of the offered item would not automatically lead to the conclusion that the bidder acted with a “reprehensible attitude” in the sense of the respective provision of the German Civil Code. The contract would thus not be void. The court stated that the bidder’s chance to make a bargain and the seller’s chance to make a better profit due to outbidding is what gives internet auctions their special charm. Further, the Court of Appeal (second instance) was not able to find any special circumstances which would prove the plaintiff’s reprehensible attitude.
Hence, based on recent case law, internet auctions in Germany may be ended early, but only for a valid reason. Otherwise the seller may face claims for the bidder’s lost profits.