Observations:
1) Let's say the listing wasn't pulled, the transaction went through, the coin was discovered to be a fake, and the police got involved. What jurisdiction would be the one in which the crime occurred?
While it may be true that the ad was composed in Canada, it was meaningless until it was actually online at the
ebay site. It would seem to me that the governing jurisdiction would be California, where
ebay has its headquarters. It is only there that the ad is put online, because the assumption is that it is the originating place where the offer is made for all to see. Unfortunately, the law is not clear in that regard; see
Boschetto v.
Hansing, — F.3d —, 2008 WL 3852676 (9th Cir. August 20, 2008), the synopsis of which can be found at
http://blog.internetcases.com/2008/...ebay-seller/2) Let us just say, though, that it would come under Canadian jurisdiction, for sake of arguement. Under which heading of the law would the case come?
Contract Law: To have a contract, there must be three elements present: (1) Offer; (2) Acceptance; (3) Consideration. In this case, the ad is the offer to the public at large. Acceptance comes when someone bids on the item in the ad, but doesn't fully occur until that person's bid is the high one. Consideration occurs when the successful bidder pays for the item in the ad. The Contract is then fully in existence.
Should things not be as they were presented (i.e., the coin turns out to be fake), then the contract becomes null and void, and both parties should rightfully revert to their positions before the offer occurred, although the buyer should be compensated for any normal costs associated with undertaking acceptance of the offer. In this case, the seller would have been smart to refund the money and add a little something "for the buyer's trouble", which would be the fair and logical thing to do, and something that is in his interests as a seller with a reputation to maintain. It would not, however, be seen as any kind of admission to any wrongful goings on on his part, and would end the matter.
Criminal Law:
a) First of all, let's look into this whole situation in regard to Fraud, which is defined by Duhaime's Online Legal Dictionary as "
Deceitful conduct designed to manipulate another person to give something of value by (1) lying, (2) by repeating something that is or ought to have been known by the fraudulent party as false or suspect or (3) by concealing a fact from the other party which may have saved that party from being cheated."
Duhaime also states that "
the existence of fraud will cause a court to void a contract and can give rise to criminal liability."
As well, Duhaime also furnishes the definition of fraud as found in Canada's Criminal Code (¶380):
"Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service ... (or) ... with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public."
Clear as mud still?
Okay, let's break down the elements of what Duhaime states:
1) "Deceitful conduct designed to manipulate another person to give something of value..." In this, it appears that there must be a plan to deceive, which would give rise to there being an
intent to deceive. Intent must be proven by the prosecution, which is something that is hard to do; however the Court allows intent to be construed by other elements, which when raised, may allow for constructive fraud. In this case, the fact that the seller states that he is a coin dealer and is selling off duplicate stock might well put him into the realm of constructive fraud, the arguement being that "A coin dealer would know full well that this is a very rare item", but this could easily be rebutted if the seller isn't really a dealer at all, merely letting on that he is, but then the burden of proving the defense now shifts to the defendant. Should it be proven by the defendant that he is merely a speculator with a bunch of extra coins and only made it look like he was a dealer, then questions would be raised about fraudulent representation by the seller.
2)"...by lying"... The lie here would be instantly provable by the ad copy.
3)"...by repeating something that is or ought to have been known by the fraudulent party as false or suspect..." Again, the true status of the seller would have to be proven, i.e., dealer or not?
4)"...by concealing a fact from the other party which may have saved that party from being cheated..." To a point, though, because
ebay is pretty much a
caveat emptor situation. The onus is on the buyer to appraise himself of the item for sale before he makes the decision to buy the item, something that is clearly stated in
ebay's policies, as well as being just good common sense.
5) Note, though, that Duhaime also goes on to say that "[t]he existence of fraud will cause a court to void a contract and can give rise to criminal liability." In this situation this would mean that fraud (once proven by the prosecution) would allow for the calling off of the deal made in the auction, and can (not
"will") give rise to criminal liability for any losses sustained by the buyer. However, losses in this situation would likely be minimal, at best, when the real nature of the coin was discovered.
6) CCC ¶380 merely states that if you have done any of these things and it has ended in a situation where the buyer has been cheated, the seller is then guilty of fraud. However, Court has to confirm that this is the case.
b) Duhaime has no legal definition for a more specific type of fraud that could conceivably be a much better area for this situation to come under, that of
Uttering, which is defined by Barron's Canadian Law Dictionary as, "
To put forth; to execute; to offer a forged instrument with representation by words or acts, directly or indirectly, that the instrument is valid; defined in the Criminal Code ¶448 to include "sell, pay, tender and put off." To utter counterfeit money or a coin that is not current are indictable offences relating to currency under ¶452 and 453 of the Criminal Code, id. "The element of deception or dishonesty which, in general, the word 'utter' imports is inherent in the sale of counterfeit money to be circulated as currency since the inevitable consequence is the defrauding of the public..." Regina v. Kelly and Lauzon (1980), 48 C.C.C. (2d) 560 at 566 (Ont.C.A.)." (Emphasis added).
On the face of it, the seller would be guilty not of fraud, but of uttering, because while fraud may exist, it is an inherent component of uttering. The fraud wouldn't have to be proven at all, because if uttering, you have unquestionably committed the fraud.
Okay, that's what the Law states. What would the reality be of this situation? What could
likely realistically happen?
1) The buyer would likely complain to the seller about the transaction. The seller would refund the seller's money. The seller would likely receive negative reputation; or
2) The buyer would make a complaint to the RCMP, who would charge the seller with uttering. At Court, it would likely be decided that the matter is a contract, is invalid, and award the buyer with damages which would likely be the value paid for the coin plus any reasonable costs incurred by the buyer; or
3) At Court, the buyer would receive no sympathy because he is supposed to be sophisticated enough as a coin collector to not be deceived, and in any event,
caveat emptor comes into play and the matter would be thrown out; or even
4) At Court, the judge would take the view that the buyer deserves no sympathy because if it could be established that the seller was not as sophisticated as he let on, and he listed a rare coin that he was in mistake to the value of and sold it for a very low price that the buyer knew was rediculously low for such a coin, it could be said that the buyer was trying to profit at the expense of the seller, and it would serve him right for being taken.
However, these possibilities aside, the Court would likely throw the matter out of Court regardless of whether the Crown laid any charges against the seller, because
ebay does have a dispute mechanism of its own, and all who enter the site are made aware of that fact. The overriding doctrine of all would be
caveat emptor, and the Court would likely defer to it.
That'll be $200, please.
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Posted 01/25/2009 09:29 am
Here's a prime example of "if it seems too good to be true it always is"! In this day and age with everyone trying to make a fast buck, collectors have to be twice as much vigilante than ever before.
