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General Terms and Conditions of Trade for Online Auction Procedures

Rechtsanwalt Dr.Dirk Roger Rissel, LL.M.

* * *



More and more often internet platforms are operated for online business-to-business auctions and sales for all kind of goods through a website. Companies allow participants to trade directly with each other as tenderer or seller and bidder or buyer.

It is advisable to apply General Terms and Conditions of Trade to all (potential) tenderers/sellers in Online auctions.

Under German law it is possible to agree Online upon General Terms and Conditions of Trade which apply to all (potential) bidders/buyers and tenderers/sellers in auctions (regardless of the physical location of the individual accessing user) if the party which uses general terms and conditions explicitly refers to those general terms and conditions and the other party has the opportunity to gain knowledge of these terms in an acceptable way. 

Even extensive terms and conditions become part of the contract if the other party has the possibiltiy to copy them for no charge.

Differing from auctions in the common sense, Online auctions are held by way of the tenderer posting a binding sales offer at an open purchase price, thereby inviting competitive bids. 

The following is a statement of terms and conditions of trade for tenderers/sellers relating to the use of a platform of a company acting as an auction house for online (business to business) auctions and sales. The Company is hereinafter referred to as Auction House.

Such terms should include a provision relating to

(1) the auction procedure itself, to the so-called reservation price and to the so-called instant clearance price, such as:

In auctions, the tenderer posts a binding sales offer at an open purchase price which may be accepted by the bidder as it submits bids on a particluar posting. The tenderer can, but is not required to indicate:

·a reservation price, meaning a price below which it is not prepared to sell and/or

·an instant clearance price, meaning a price at which the tenderer agrees the auction being closed and the contract being awarded.


(2) what a binding sales offer by the tenderer shall contain, such as 

To post an offer, the tenderer shall indicate:

a)product(s) and quantity(ies) to be sold,

b)specific date of the beginning of the offer and the end of auction,

c)the amount of the instant clearance price and/or the reservation price, where applicable as well as,

d)an opening price at which the auction will begin. In the event that a reservation price has been set, the opening price cannot reflect a discount of more than 20 % of the reservation price.


(3)the currency and Inco terms, such as

The tenderer/seller specifies the settlement currency and selects the exact Inco terms that apply to given posting. All prices are stated exclusive of any taxes.


(4) the irrevocable and binding nature of an offer, such as

When posting an offer on the database of Auction House, the offer is deemed to be an irrevocable and binding sales offer until the end of auction from the point in time when the reservation price has been reached for the first time by a bidder or when the instant clearance price has been accepted by a bidder.


(5) the obligation of tenderer to transfer ownership, such as

In an auction without reservation price or instant clearance price, the tenderer is obligated to transfer ownership in the offered product to the relevant bidder at the price corresponding to the highest bid at the end of auction. If an instant clearance price or a reservation price have been set, the tenderer is only obligated to transfer ownership if the bid corresponds at least to the reservation price or the instant clearance price has been bid.


(6) the binding nature of the bid, such as

Upon submitting a bid to the database of Auction House, this bid is deemed to be irrevocably submitted until the end of auction, meaning that the bidder may increase but not reduce or take back its bid. All bids are binding unless they do not reach the reservation price, where a reservation price has been set.

Only bids which are submitted in compliance with these General Terms and Conditions of Trade take part in the auction.


(7) the end of auction and payment of purchase price, such as

The auction for a specific product ends:

a)in case ofan auction with instant clearance price, when the instant clearance price is bid,

b)in case of an auction with no instant clearance price or in which the instant clearance price has not been bid, with the end of the auction determined by the tenderer of this product,

c)upon withdrawal of a sales offer before it becomes binding and irrevocable (see no. 4).


(8) the information of tenderer and bidder and obligation of winning bidder to pay the purchase price, such as

Immediately after the end of auction, the tenderer and the winning bidder will be informed about the outcome of the auction.

The winning bidder undertakes to pay the offered purchase price and related taxes to the tenderer pursuant to the terms and conditions of sale referred to by the tenderer ( and in absence of any such provision within 14 working days after Auction House releases the identity of the tenderer to the bidder.


(9) the award of the contract and the conclusion of the purchase contract, such as

The bidder with the highest bid at the end of the auction shall be awarded the contract if that bid is at or above the reservation price, where a reservation price has been set.

When the contract is awarded, a purchase contract is validly concluded between the tenderer and the bidder being awarded the contract. The purchase contract is governed by the contractual conditions indicated by the tenderer in its offer or in the absence of such specific conditions by the relevant statutory provisions of the jurisdiction chosen by the tenderer or in the absence of a choice of law by the relevant provisions of the German Civil Code.


(10) possible negotiations between buyer and seller outside the auction procedure

If the tenderer and a bidder negotiate outside the auction procedure for any product listed in on thedatabase of Auction House, the tenderer and the bidder agree to return to the auction procedure once negotiations are completed where the bidder shall submit a bid, and the parties shall follow the procedures outlined in these General Terms and Conditions, including the payment of the service commission/fee.


(11) the exclusion of tenderers/sellers; the rejection or amendment of offers, such as

Auction House may exclude any participant from any auction if the participant has violated these General Terms and Conditions of Trade.

Auction House furthermore reserves the right to exclude products from offers, to refuse or pull-back acceptances, bids or offers as well as to discontinue single auctions or its services all together.


(12) the limitation of liability, such as

Auction House shall not be liable for declarations or ommissions from the participants.

Auction House shall not be liable for the credit-worthiness of the bidder/buyer.

Auction House hereby expressly disclaims all responsibilty and liabilty which may arise from the payment processes between bidder/buyer and tenderer/seller.

Auction House hereby expressly disclaims all responsibility and liability with regard to

-the publication of the posted auctions

-the posting/acceptance of offers/products

-the consideration of submitted offers

-the functioning of the Auction House system

-the indisturbed execution of auctions

Auction House shall not be liable for damages occurred when accessing the site of Auction House which the tenderer/seller could have prevented with reasonable means, in particular program and data protection as well as security or back-up features.


(13) liabilty of tenderer/seller, such as

The tenderer/seller is liable to Auction House for all damages that Auction House incurs due to a violation on the side of the tenderer/seller of the laws of these General Terms and Conditions of Trade and is obligated to exempt Auction House from any and all possible claims of third parties. In particular, the tenderer/seller is liable to Auction House for damages which Auction House or third parties incur due to negligent transmitting of defective/viral data.


(14) posting fee and service commission, such as

Upon posting a product listing, the tenderer/seller is obligated to pay the applicable posting fee which is due and payable immediately upon receipt of a respective invoice.

The tenderer/seller is obligated to pay to Auction house a service commission in the amount of a certain percentage of the offered purchase price agreed upon plus relevant statutory taxes and duties (in particular statutory value added tax). The service commission is due and payable upon receipt of the respective invoice from Auction House.

The (further) development of the legal relations between the tenderer/seller and the bidder/buyer is irrelevant for Auction House´s commission claim. In particular a rescission of the purchase contract or a non-payment or reduction of the purchase price do not result in the commission claim to be dropped or reduced.


(15) data protection, such as

Auction house shall transmit all information in connection with the registration, the posting of offers and the listing of offers solely to the other participants in the form and to the extent suitable for the execution of the auction.


(16) choice of law, such as

All legal relations between the tenderer/seller shall be exclusively governed by and in accordance with German Law.


(17) Non-assignment of rights, such as

The tenderers/sellers are not entitled to fully or partially assign to third parties rights following from the contractual relationship with Auction House without the prior written consent of Auction house.


(18) Amendment

Auction House may amend these General Terms and Conditions of Trade at any time. Such amended terms will be posted to the web-site of Auction House and will become effective 14 days after they are posted.


(19) invalidity of provisions, such as 

Should single provisions of these General Terms and Conditions of Trade be or become fully or partially invalid or unenforceable, the remainder of these General Terms and Conditions of Trade or independent parts of such provisions shall continue in full force and effect.

In such case the parties are obligated to find an agreement which comes closest to the economic aim intended by the invalid or unenforceable provision. The same applies in case of an omission.


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