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Before the Auction: Understanding User Agreements

When you register with an auction site you have to consent to its user agreement--also known as a terms of service or terms of participation agreement (Amazon.com calls it a participation agreement). Because users want to get started auctioning right away, they might gloss over this important document. With that in mind, we've highlighted some of the key elements you should be aware of when reading a user agreement.

The Way That You Use It
In brief, user agreements explain the guidelines and policies of an auction site. Fees, warranties, listing restrictions, privacy policies, how the site handles disputes among its buyers and sellers--you'll find all this information and more. Some user agreements can be quite long (3,300-plus words for eBay, 3,400-plus for Amazon.com Auctions), but you'll be well served if you take the take to read these documents carefully. You'll be more informed about the site and what you can expect when you buy and sell in the future. Avoid sites that have vaguely worded user agreements or none at all.

Usually after typing in your personal information you'll be taken to a page that contains the site's user agreement. At that point, you'll have to click an "I Agree" button to continue the registration process. Many sites also include a link to their user agreements at the bottom of their main page.

Just a Venue
One of the main purposes of user agreements is to alert users of a site's responsibility--or rather its lack thereof. User agreements spell this out very clearly so that the sites are absolved from any legal liability. Auction sites are "just a venue," a third party that brings buyers and sellers together to conduct a transaction. They're not guaranteeing anything--not the authenticity of the items up for auction, not the trustworthiness of the buyers and sellers who do business on the site. Nor do they offer any warranties. Unless a seller provides a manufacturer's warranty, the merchandise is sold "as is."

To give you a better idea of how this works, here are excerpts from two user agreements:

eBay: Our site acts as the venue for sellers to list items (or, as appropriate, solicit offers to buy) and buyers to bid on items. We are not involved in the actual transaction between buyers and sellers. As a result, we have no control over the quality, safety or legality of the items advertised, the truth or accuracy of the listings, the ability of sellers to sell items or the ability of buyers to buy items. We cannot ensure that a buyer or seller will actually complete a transaction.

Amazon.com Auctions: It is up to the Seller to accurately describe the item for sale or auction. Amazon.com cannot and does not know whether any listing is accurate, complete, misleading or deceptive or if the Seller and Buyer will perform as promised so you should always take due care in entering into any agreement with another person…Because Amazon.com is not involved in the actual transaction between Sellers and Buyers and is not the agent of either for any purpose, Amazon.com will not be involved in resolving any disputes between participants related to or arising out of any transaction. Amazon.com urges Sellers and Buyers to cooperate with each other to resolve such disputes.

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