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What legal recourse is there for a seller who backs out of a completed auction?
October 19, 2012 10:47 AM   Subscribe

What legal recourse is there for a seller who backs out of a completed auction on Flippa.com?

If someone sells a website (or domain, or anything else) on Flippa.com and then after the auction is over, backs out before any money ever exchanges hands or any documents are signed...what real legal recourse is there from the winning buyer?

Flippa's Terms: https://flippa.com/termsandconditions#c-5 (Section 5.1)

"When a Seller agrees to sell a Website to a Buyer (whether by way of Auction or Private Sale) and the Buyer agrees to purchase that Website, then that agreement for the sale of the Website ("Sale Agreement") will be legally binding on both the Seller and the Buyer."

The Terms make reference to the agreement being "legally binding" between the Seller and Buyer, but given Flippa is an Australia company, do they have any real say outside of that jurisdiction?

Could the buyer actually force a sell? Again, on the assumption no money ever exchanged hands and no documents were ever signed.
posted by anonymous to Law & Government (4 answers total) 2 users marked this as a favorite
 
The Terms make reference to the agreement being "legally binding" between the Seller and Buyer, but given Flippa is an Australia company, do they have any real say outside of that jurisdiction?

Well Flippa is a private entity, so they don't really have jurisdiction. Courts and law enforcement agencies do, but private individuals and entities don't.

Could the buyer actually force a sell?

Theoretically. It would involve hiring a lawyer, filing suit against the seller, probably in the form of "John Doe," since you don't know who they actually are, then serving Flippa with a subpoena to get them to release their user info. Then you'd use that to identify the seller, and name them as the real party in interest, and go from there.

Assuming, of course, that the court you file suit in both has jurisdiction over Flippa and the seller. Otherwise, Flippa will ignore your subpoena and the seller won't show up to court. Which makes this a rather complicated potentially international personal jurisdiction question. You might find yourself litigating in a court in a foreign country, which may or may not have contract laws which favor your desired outcome.

Practical answer: this could easily cost you tens of thousands of dollars in legal fees, so unless it's really important, you're probably best off just letting it go.
posted by valkyryn at 11:11 AM on October 19, 2012 [1 favorite]


I am a lawyer, but I am not your lawyer and the following is not legal advice.

This is the sort of question that you will want to hire a lawyer to answer. What you've described is probably a binding contract + default. How it works in the event of a default is something that is highly contingent on the facts, and will require time and effort to determine. Top of my head, these questions come to mind:

Can the aggrieved party hale the defaulting party into court?
Is there a even court of competent jurisdiction over the defaulting party?
What are the choice-of-law rules in that jurisdiction?
Under the laws which the appropriate court will apply, is there a contract? A breach? What remedies are there for breach?
Assuming success at trial, how are remedies pursued in the jurisdiction where the defaulting party and/or the property at issue are to be found?

Especially if, as your question seems to imply, the buyer and defaulting seller are across some international boundary, these are questions which will be very expensive to answer.

On Preview: yeah, what valkyryn said.
posted by gauche at 11:15 AM on October 19, 2012


Please PM me.
posted by third word on a random page at 12:51 PM on October 19, 2012


I want to agree with valkyryn on everything. I tell people not to sue unless at least $50,000.00 is at stake. The stress and opportunity costs will eat you alive.
posted by bswinburn at 1:42 PM on October 19, 2012


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