Blanket “no returns” clauses are illegal
See ACCC v Valve.
Under the Australian Consumer Law (ACL), purchasers of goods have a statutory right to a refund in the event of a major fault with the product. This cannot be contracted out of and it is unlawful misleading and deceptive conduct to state that there are no refunds in all circumstances. It is lawful to refuse refunds because the buyer changed their mind.
eBay knows this and they tell their buyers that they have to accept returns in those cases.
However, let’s assume that Alice knows this and her “no returns” clause is a legal “no returns for change of mind” and there is no fault with the product.
When was the contract formed?
Contract formation in online sales usually follows the following steps:
- The seller makes an invitation to treat to the world by listing their product. No contract yet.
- The buyer makes an offer to the seller at the seller’s asking price. Still no contract.
- The seller accepts the offer by dispatching it to the buyer; usually by mail or courier but here we have a buyer picking up the item. It is at this point that a contract is formed.
At any time before step 3, either party can walk away, after step 3, there is a legally binding contract.
So, if Bob rejects the item when he inspects it, we are before point 3 so he can do this. “A couple of days later”, he can’t.