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Archive for: Art. 70¹ CC

Civil law, case II Ca 26/11

May 9th, 2011, Tomasz Rychlicki

Andrzej J., a Polish farmer, ordered his 17-year-old son to put up for sale a tractor. He told him to use Allegro.pl, the most popular Polish auction website. It was one of the first auctions on the Internet for both of them. However, his son, who started the action, did not specify a minimum selling price. The auction was attended by six interested parties. The highest offer of 11.000 PLN bid by Adam S., let him to win the auction. Andrzej J. refused to hand over the vehicle, claiming that the winning price was too low. He argued that his son is minor and although he received his father’s command, he exceeded the scope of the mandate, because despite the clear indication, he did not select in the options, the minimum price that should be set to 38.000 PLN (it was set at the last day of the auction at the suggestion of the mother). Andrzej J. claimed that he was not aware that such transaction can be concluded below the minimum price, and he hadn’t the possibility of withdrawing the offer. He argued that he acted under the influence of the error in fact, therefore, he should be released from the conclusion of the agreement.

The District Court in Łuków held that the claim for a vehicle at the price of 11.000 is fully justified. The Court pointed to the wording of Article 70¹ of the Civil Code.

Article 70¹. § 1. A contract may be concluded by means of an auction or tendering.
§ 2. An announcement of an auction or tendering shall specify the time, place, object and terms of the auction or the tendering, or to indicate how such terms are available.
§ 3. The announcement and the terms of the auction or the tendering may be changed or revoked only when it has been stipulated in their contents.
§ 4. Since the moment of making the terms available and making the bid respectively by an organizer and the bidder according to the announcement of the auction or tendering, they shall proceed in accordance with the provisions of the announcement, likewise the provisions of the terms of auction or the tendering.

In this case, the terms for auctions and the procedures for the conclusion were established by Allegro in its Terms of Service, which were both accepted by the seller and the buyer. According to the terms of Allegro, the seller can make changes to the content of the auction only in three minutes after the auction begins. The Court ruled that the son of Andrzej J. did not act as his proxy, but as a messenger, whose role was purely technical, he had to enter some data on an auction website, therefore he could not be regarded as representative based on provisions of the Polish Civil Code.

Article 95. § 1. Barring the exceptions specified in statutory law or resulting from the character of a given act in law, an act in law may be performed through a representative.
§ 2. An act in law performed by a representative within the limits of the authorization shall have direct effects for the person represented.

Article 96. The authorization to act on behalf of another person may be based on statutory law (statutory representation) or on the declaration by the person represented (power of attorney).

The District Court in Lublin in its judgment case file II Ca 26/11 upheld a lower court’s judgment. See also “Civil law, case I ACa 295/10“.

Civil law, case I ACa 295/10

July 27th, 2010, Tomasz Rychlicki

Allego.pl is a very popular Polish auction website. Michał Z. is one of many of its users. He was acting on behalf of his father’s company when he placed an auction. When setting the option “buy now”, he allegedly by mistake underpriced the item he was trying to sell. The item was valued for 74.000 PLN but Michał Z. set the “buy now” price for 7.400 PLN. Alicja W. decided to buy this item and she choose “buy now” option. She received an e-mail confirming her purchase from Allegro.pl

Michał Z. tried to void the contract, arguing that he has made a mistake when setting a price for this auction. When Alicja Z. came for the auctioned item, its owners have refused to release it. They proposed purchase of another one – in a promotional price of 50.000 PLN. Alicja Z. did not agree to a subsequent proposals, including 20.000 PLN compensation and she sued.

The District Court in Radom dismissed her claim. The Court ruled that the parties came to the conclusion of the contract of sale, but Michał Z. has successfully evaded of legal consequences of his offer, because it was made by error of fact. It was clear for the Court that the value of the item was given incorrectly, and it did not correspond to real costs of such products. The Court ruled that Alicja W. was certainly aware of this price disparity. She could have acquired such knowledge even from the website of the seller because the address was included in the offer. Alicja Z. appealed.

The Appellate Court in Lublin in its judgment case file I ACa 295/10 held that if the declaration of will has been made to another person, the evasion of legal consequences it permissible only if the error was caused by that person, even if such person was not guilty, or if such person was aware of the error (for example such knowledge was acquired during the negotiations) or the error could easily be noted by such person. According to the Court, none of these conditions has occurred in this case. The Court ruled that it cannot be assumed that someone must be aware of the fact that the price is wrong, and that it was possible for such person to find out the actual price.

The Appellate Court ruled that the District Court overlooked the fact that the auction was placed on Allegro website, which has its own rules (TOS) of trading/auctioning. The item was only available at the auction with the “buy now” option, in which the seller puts the goods at a fixed, predetermined price. The contract between the seller and the buyer takes upon confirmation of the “buy now” option, as the buyer is automatically notified. The terms of such auction cannot be changed in relation to the buyer who has made an offer, before such change was made. The seller, who choose this type of auction, is bound by the rules and cannot change the conditions of the transaction after a bid by the buyer. The Appellate Court sent this case back for reconsideration.

Civil law, case II C 903/06

August 2nd, 2007, Tomasz Rychlicki

The Regional Court in Warsaw in its judgment of 6 February 2007 case file II C 903/06 held that Internet auctions organized by the popular websites such as allegro.pl and ebay.com are auctions as defined in article 70 ¹ of the Civil Code. Auction’s closing within the meaning of the Civil Code is a statement generated by the system or by auction’s organizer and sent to the bidder which has submitted the best offer. This message should be treated just as a statement of will of the seller who accepted the offer. It means that the contract takes effect not due to the passage of time, but precisely upon a receipt by the bidder of seller’s statement of acceptance of his offer.