Lost merchandise: Replacement or refund

Question

Bob ordered something on eBay from a seller and wins the auction for £40. The item is in good condition but more usually goes for closer to £150. Perhaps it has some uncommon quality that especially suits Bob but not others thus making it more expensive (like a phone locked to what is incidentally his favoured network) or perhaps it just happened to go for less by a fluke of luck but in any case Bob spent a fair bit of effort monitoring the market for the product he wanted at a favourable price.

He orders it and the seller posts it to an eBay product collection point, and Bob gets notified that it has been received thereby and thus is ready for him to collect.

Bob goes to the pickup location which is inside a partner business like an Argos but they say they cannot find it anywhere given the collection code or Bob’s name as an addressee.

This is apparently Argos’s failure but they say to speak to eBay. Bob clicks the item not arrived button on eBay which caused consternation for the seller who immediately posts their proof of posting in defense.

Firstly should Argos or eBay be the subject of the question?

And secondly, surely Bob would be entitled to a refund, presumably from eBay or possibly Argos, and one would hope not the seller, but does that really compensate Bob? When is another bargain like that for the item he wanted going to come along again? Most products are more expensive or they are locked to a different network or they are designed for right handed individuals etc so none really suit him and rarely for the price of £40.

Who is liable and are they liable for a replacement or a refund?

Answer 1

canada

Common-law remedy: expectation damages

The general measure of damages for breach of contract is expectation damages: "the plaintiff will be entitled to the value of the promised performance" (Bank of America Canada v. Mutual Trust Co., 2002 SCC 43 at paragraph 26); "the purpose of expectation damages is to put the plaintiff in the same position it would have been if the contract had been performed (Grandeur Homes Inc. v. Zeng, 2021 ONSC 4005 at paragraph 19). Unless Bob's contract specifies some other entitlement in the case of non-delivery, Bob will likely be awarded expectation damages.

As a starting point, courts are likely to view the market value of the contract (e.g. £40) as the floor for expectation damages, but it is open to Bob to prove higher expectation damages by demonstrating the cost of obtaining a sufficiently similar alternative, while reasonably attempting to mitigate damages. That is: Bob should not simply announce a million-pound open bid for a similar phone, and Bob should not wait around if the price is increasing, but Bob could enter another reasonably competitive auction. Also, if Bob can prove losses incurred by not having the item in the meantime, those will also form part of the expectation damages.

Statute: Sales of Goods Acts essentially provide for expectation damages

Provincial Sale of Goods Acts also say this. See e.g. Ontario's:

The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the seller’s breach of contract.

Where there is an available market for the goods in question, the measure of damages is, in the absence of evidence to the contrary, to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver.