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Consider a scenario where a community site, based in Switzerland, with an international member base has two memberships: free accounts and premium subscription-paying accounts. The primary service provided by the website is education as well as providing research tools. However, one feature of the paid subscription is a facility whereby members can send offers to the owner of an item they are interested in.

Consider the below two members:

  • Member X (free account) has posted photos and details of an item for community interest.

  • Member Y (premium account) sees this and decides to offer to buy the item:

After the following process, Member Y claims to have received a fake/inferior item:

  1. Member Y makes contact by entering a value and and clicks a button to submit the blind speculative offer to Member X

  2. Member X receives the offer price as well as Member Y's country and community reputation, and can then choose whether or accept/reject/counter the offer

  3. Member Y transfers payment: through paypal (for example) and Member X then ships the item

Considering that Member X never marketed the item for sale but only decided and agreed to sell after receiving an initial purchase offer from Member Y, as well as the fact that the site neither 1) sell items or 2) provides an online store for members to sell items...

Is the site liable due to having a facility for subscription members reaching out to make blind bids to other members items?

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    You should add a tag indicating what country you are interested in. – user301 Jun 20 '15 at 17:17
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    Thanks Thomas - I did wonder about that but what if the members (as well as the site) were all based in different countries? – Bendy Jun 20 '15 at 19:29
  • Thanks @nomenagentis - I've expanded the question for more clarification....hope that makes more sense – Bendy Jun 23 '15 at 13:07
  • @Bendy The facilitation provided by the website, is it specifically for the sale / purchase of items? Also, you need to provide a jurisdiction for the question. International does not work like that. There are ~180 countries in the world, each with different laws. What country would the website owner be located? – Andrew Jun 26 '15 at 14:18
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    So, your site just provided the means to communicate the information (like email) with a list of items that someone happens to have? Is there anything in the TOU that prohibit / promote the behaviour? From the description you have described, just about any social media service could be liable if you were liable. I'm not positive about Switzerland, but it would be hard to make the website liable without proof the website was involved in the transaction. If you're unsure, but a clause not to do that in the TOU and not really enforce it. (this is not an answer by any means) – Jdahern Jun 29 '15 at 17:59
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+50

I am not a Lawyer, I am not your Lawyer.

This really depends on the country in which the company owning the website is domiciled and where it operates. For example, if the company is based in the U.S. and only markets in the U.S., only U.S. laws apply. If the company is based in the U.S. and markets in the U.K., they may be subject to U.K. laws. Assuming that the company is based in the U.S.:

If the website does not market itself as a trading platform nor gives any reasonable expectation that it is a trading platform (e.g., by adding "contact to buy buttons"), then the company would have no reasonable liability for any transactions. They may still be involved with any legal case that deals with the transaction (emails and such). If Member Y made such claim, they would have to take it up with the Member X in court.

Think about it this way: You see an item on Pinterest you like, you then contact the use to buy it, that user sells the item to you, you don't like it. Pinterest would not be liable for the damages done.

Even if the site was a trading platform, they don't have any reasonable liability for goods sold on there site. Only direct sellers have liability.

As an added protection, your TOS should include something like:

site is not a venue for commerce.

site is not responsible for communication. site does not pre-screen users (except for services that require an application) or the content or information provided by users. If users wish to conduct transaction on the site, site does not transfer legal ownership of items from the seller to the buyer. You may also wish to consider using a third-party escrow service or services that provide additional user verification.

You agree that site is NOT a venue for commerce and as such is not responsible or liable for any content, for example, data, text, information, usernames, graphics, images, photographs, profiles, audio, video, items, and links posted by you, other users, or outside parties on site. You use the site service at your own risk.

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  • Ironically, last night I saw a "documentary" on how TOS and such are becoming increasingly long and overly complicated. But what they didn't show what the other side on why they're becoming that way. This type of stuff is why. Most sites would love to have a simple don't be an idiot policy. We had to kick an user off for saying in the sites public forum that they were going to come down and cut our CEO balls off. After that, she contacted the BBB and complained that we did not have the right to do so. We had to make our TOS longer because of her, and add a new page about stuff like that.... – Jdahern Jul 3 '15 at 16:19
  • Thanks @Jdahern. Very interesting and something I will look into with a lawyer. Regarding your comment on TOS - one thing I know of Swiss law compared to US and UK is that Swiss TOS are nowhere near as exhaustive as US/UK because they have a set a ser of foundation rules which apply across the board to provide a known standard of responaibilities for everyone. I don't know the german term for this but if anyone is interested, let me know and I will find out more – Bendy Jul 3 '15 at 22:54
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There's a different way of approaching questions like this that could obviate what may be an expensive and unsettled legal question:

  1. Try to buy liability insurance. Let the insurance company underwrite, price, and assume the legal risk.

  2. Take advantage of the corporate shield. Maintain a minimum of assets in the company so that it is not an attractive target for litigation. Because being legally right is not an airtight defense against being attacked in civil litigation.

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