LAW CASE belonging to IBPEXM121R2 – Exploring Markets (BUS)
Toshiro Umezawa, residing in Osaka (Japan) is probably the world’s biggest anime1
fan. He is
so devoted to anime that on 15 March 2021 he, due to his rather terrible financial situation,
put up his Harley Davidson FL 1340 for sale on eBay: he desperately wanted to buy a limited
collector’s edition figure of his favourite anime character, Megumi Kato (such limited
collector’s edition figures can easily cost hundreds of thousands of Japanese Yen – some even
cost millions). In addition to that, he wanted to reinforce his overall financial position. An
auction-style format was used with 25 March as the end-date. The auction duration, for that
reason, was exactly ten days.
Aiko Yoshida is the Managing Director of Fenrir Inc, a medium-sized Japanese software
company. Fenrir Inc is one of your NGO’s clients. For Fenrir Inc’s establishment in Tokyo, Aiko
Yoshida is looking for a motorcycle; a motorcycle will make it much easier to navigate traffic
in Tokyo! Aiko was the 21st and last bidder who offered the highest price, namely ¥ 420,000.
Toshiro, though, didn’t deliver the motorcycle to Aiko but sold it to a third party instead for ¥
900,000, without using eBay. Toshiro did not contact Aiko.
It goes without saying that Aiko is less than pleased. She decides to take legal steps: Toshiro
receives a summons from Aiko, in which Aiko demands ¥ 550,000 in damages (i.e. the
difference between her bid and the average value of the motorcycle) as well as
reimbursement of any and all legal fees and expenses.
Toshiro now indicates that he never used eBay before and that he accidentally put a minimum
starting bid of ¥ 1 in lieu of ¥ 900,000. The average sales price of similar motorcycles is
approximately ¥ 970,000. Toshiro himself didn’t notice the problem because he didn’t really
follow and keep track of the bids as the auction progressed. He had more pressing matters to
attend to, he states (attending anime fairs, for example!). Moreover, Toshiro is of the opinion
that he was allowed to refuse Aiko’s bid anyway.
1 Anime is hand-drawn and computer animation originating from Japan.
➢ eBay’s User Agreement includes the following clauses:
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“4. As Buyer you have the legal obligation to complete the transaction with the Seller:
in case you are the highest bidder at the end of an auction (provided the bid is at or above the minimum
price indicated by the Seller, including any bid that becomes the highest after another bid is validly
withdrawn) and your bid is accepted by the Seller, unless the object (…) is in violation of the law or the
User Agreement.
(…)
5.2 Selling objects. If you, as Seller, have received at least one offer at or above the minimum price you
are obligated to complete the transaction with the highest bidder after the expiry of the auction, unless
(a) the Buyer fails to comply with your sales conditions (such as the payment method), or
(b) in case it is impossible to verify the Buyer’s identity.”
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In your evaluation of the legal case, you shall go through the following steps:
1. Analyse the case from the perspective of the two parties under English Common Law,
so:
• provide a detailed (!) analysis of the case from the perspective of AIKO
YOSHIDA; and,
• provide a detailed (!) analysis of the case from the perspective of TOSHIRO
UMEZAWA,
in relation to the steps of offer and acceptance and defects in the contract.
2. Evaluate the two perspectives(critical thinking): What do you think is the most suitable
outcome? Include at least two (2) reasons in your answer and emphasise your opinion.
Further instructions can be found in the assignment description.