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I wanted to ask in regards to the eBay/PayPal split about a month ago.

Namely:

  1. Do the user agreements continue once the companies split?

In my mind, because PayPal is splitting off into its own company and eBay is remaining as the same company: In order for a person to continue using PayPal, in effect he must agree to a new user agreement. New company, new rules and regulations.

  1. If so, how would this affect users who are not in good standing?

With this said, After the split, users in good standing were asked if they agreed to the new terms and agreements. If they agreed, they continued without issue. If they didn't, they were to close their accounts.

But for users not in good standing (which PayPal calls "limited accounts") the option to close accounts are not available. I.e., PayPal does not allow one to close a limited account.

  1. How would a user who was not given the option to agree/disagree with the new terms go about terminating the account (business relationship)?

There are more layers of context and background, but I wanted to boil down my questions to this for the time being.

10

The eBay user agreement contains this clause:

In our sole discretion, we may assign this User Agreement, by providing notice of such assignment in accordance with the Notices Section.

The current PayPal agreement says:

You may not transfer or assign any rights or obligations you have under this Agreement without PayPal's prior written consent. PayPal reserves the right to transfer or assign this Agreement or any right or obligation under this Agreement at any time.

It's a good bet that every user agreement you ever clicked on had a similar clause.

What do these clauses mean? They mean that when eBay spins off a new company, they can assign their rights, and your duties, under the contract to the new company. Your assumption that a new user agreement is required is incorrect.

  • 1
    Under UK law is is possible that this would be found to be unfair (and therefore not enforceable), as it lets one party assign right, but not the other party. – Ian Ringrose Jul 30 '15 at 7:59
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In the hypothetical:

Assume the following:

  1. User U makes an agreement A with company C.
  2. C is later acquired by company D.

Then:

D inherits C's obligations to U under A because D is a successor to A. Unless that inheritance is specifically prohibited by A.

Disclaimer: This analysis is not intended to apply to your or any specific case. I am not giving you legal advice so please do not follow it.

  • So the user has no say whether or not they want to continue abiding by the user agreement? It is "forced" so to say? – Frank FYC Jul 29 '15 at 18:08
  • Typical agreement language stipulates agreements are binding on successors and parties rights can be assigned. If a successor wants to change the agreement, the counter party must agree to the changes in order to be bound by them. – Mowzer Jul 29 '15 at 18:11
  • I don't know if I am allowed to be specific, (as in direct the question to my personal situation, if I can't let me know), but my recollection was that after the split, users in good standing were asked whether or not they agreed to the terms and conditions before they go 'into' their account. If not, they were asked to close their accounts. Users not in good standing (such as me) were not asked, I just went straight to the homepage. – Frank FYC Jul 29 '15 at 18:14

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