Recently, a report that “I bought an imported Mercedes-Benz car for 1 yuan but the contract was broken” has been on the hot search on many platforms. Mr. Zhang from Changsha, Hunan, bought an imported second-hand Mercedes-Benz car with a market value of about 120,000 yuan at a starting price of 1 yuan. However, the auction company asked Mr. Zhang to cancel the auction on the grounds that the price did not meet the client's psychological expectations, and said it could only pay 5% of the auction price, which is 5 cents.
Many netizens have questioned this. Is it reasonable to set such a starting price that is out of touch with the market? Can the auction be canceled if the auction price does not meet the psychological expectations of the consignor? If you really get a high-priced item at a low price, how confident are consumers that they can finally make a deal?
I bought an imported Mercedes-Benz for 1 yuan and the contract was broken.
According to Hunan Radio and Television Public Channel, on October 18, Mr. Zhang, who usually loves online shopping, bought an imported Mercedes-Benz with a starting price of 1 yuan on the Ali auction platform. The vehicle is an "originally imported Mercedes-Benz" with an age of 11 years and a mileage of 68,000 kilometers. The auction company assessed the price at 125,000 yuan.
Mr. Zhang said that half an hour after he took the photo of the Mercedes-Benz, he received a call from a staff member of the auction company Wuhan Xinche Material Technology Co., Ltd. (hereinafter referred to as Wuhan Xinche), saying that the auction had gone wrong and needed to be cancelled, and that a liquidated damages of 5% of the transaction price would be compensated. "Just pay me 5 cents."
For such a compensation plan, Mr. Zhang said he could not accept it, and the other party explained: "What is being auctioned here is the qualification to participate in the auction, not the purchase of the car, and the auction requires confirmation by both parties."
Mr. Zhang believes that the contract does not mention the need for confirmation by both parties. He hopes that the other party will fulfill its obligations and will consult a lawyer later. If necessary, he will also use legal weapons to defend his rights.
A staff member of the auction house said in an interview that the auction order was subject to a breach of contract because the car owner breached the contract and believed the price was unacceptable. "The breach of contract compensation platform stipulates that the auction price is 5% of the auction price, and the minimum compensation is 300 yuan."
Auctioneer: The price does not reach the psychological price of the consignor
The reporter called Wuhan Xinche Company on the afternoon of October 21, and an operator responded: "We are just an auction company. The vehicle belongs to the consignor (the actual owner of the vehicle) and not to the auction company. Therefore, it is not that we are unwilling to sell, but the price does not meet the psychological price of the consignor."
The operator said that after learning of Mr. Zhang's appeal, the auction company, as an intermediary, has been actively conducting three-party coordination. "We have initially reached an agreement with the client and should make a public response next week." As for what kind of agreement has been reached and whether Mr. Zhang can drive away the Mercedes-Benz sedan at the starting price, the staff member said it is not yet convenient to disclose it to the public.
The reporter then called the trading platform "Alibaba Auction", and an operator said: "Specialized personnel have been following up on the matter. The two parties are still negotiating. The platform will supervise the resolution of the dispute in accordance with the requirements and the spirit of the agreement."
It’s not uncommon for luxury cars to be auctioned starting at 1 yuan
The reporter saw on the platform auction interface of Wuhan Xinche Company that there were many vehicles auctioned at low prices. For example, a BMW 2 Series registered in 2011 has a starting price of only 8 yuan; a Mercedes-Benz GLA registered in 2015 has a starting price of only 9 yuan.
On the auction page of Wuhan Xinche Company, there are still vehicles bidding at low starting prices.
The reporter called to inquire about the authenticity of the above low-price auction information.
“In order to attract bidders, auction companies often adopt a bidding method with no reserve price and no maximum price.
In fact, it is not uncommon for luxury cars to be auctioned starting at 1 yuan. The reporter saw on the Alibaba auction platform that among the second-hand cars being auctioned on the 21st, luxury brand cars such as the 2017 BMW 5 Series, the 2009 BMW X5 (imported), the 2013 Mercedes-Benz GLK300, and the 2019 Hongqi HS7 all had a starting price of 1 yuan, and platform information showed that the above-mentioned 1 yuan starting vehicles were all bid at 1 yuan.
The reporter noticed that during the auction process, in addition to paying a deposit of varying amounts, if the auction is successful, a software service fee of 0.5%-1% of the transaction price and a commission fee of 7% of the transaction price will also be paid.
Several auction companies on the auction platform have posted information on auctioning luxury cars starting at 1 yuan.
The reporter consulted multiple auction agencies on the platform and learned that setting the starting price is the seller’s right, and the platform does not participate in supervision. A staff member of Alibaba Auction said: "Whether the starting price is 1 yuan or 10 yuan, it is the seller who decides, and the platform will not interfere."
The staff member pointed out that starting prices of 1 yuan and 10 yuan are usually set to attract onlookers and attract more people to the auction. In fact, it is rare for anyone to buy a vehicle at the starting price.
So if a customer really buys it at a price of 1 yuan, will the seller be able to successfully fulfill the contract? Many auction companies have said they can drive away the car if they get it. A staff member of an auction company that sells BMW X5 (imported) cars with a starting price of 1 yuan said that in addition to paying the corresponding commissions, transfer fees, etc., no additional fees will be charged, and the deposit paid will be returned to the customer. "If you really get this car for 1 yuan, then this car will be yours."
"We have encountered people who bought BMW cars for several thousand yuan, but we have never met people who bought them for 1 yuan." The staff member said that although the starting price is only 1 yuan, usually when the bidding is about to end, a large number of bidders will increase their bids. It is rare to buy a vehicle with a starting price of 1 yuan.
Is the starting price that is out of the market reasonable?
"An auction without a reserve price, also known as an auction without an appraisal, means that the auction object does not have a reserve price, and the bidders bid for themselves, and the one with the highest bid purchases the auction object." Fu Jian, director of Henan Zejin Law Firm, explained in an interview with reporters that my country's current auction law does not have specific regulations on the starting price, and there is no compliance problem in auctioning without a reserve price and a maximum price.
In Fu Jian's view, although the no-reserve bidding method complies with legal procedures, deliberately setting prices that are seriously deviated from market conditions, or prices that are far lower than the client's psychological price, often disrupts the normal trading order and reduces bidders' trust in the auction house. In the long run, such behavior will not allow the auction industry to develop in the long run.
Some auctioneers have promised in the public auction information that the sale can be completed even if the price is only 1 yuan.
Although there is no express provision in the law, there are many requirements and explanations for the minimum bidding price in other legal documents. Zhang Jiarong, a lawyer at Guangdong Jinqiao Baixin (Changsha) Law Firm, introduced that according to Article 8, paragraph 1, of the "Regulations of the Supreme People's Court on the Auction and Sale of Property in the Civil Execution of the People's Courts": "Judicial auctions need to set auction reserve prices" to avoid damage to the rights of the enforcement parties due to too low auction prices. In particular, it is necessary to prevent collusion and cheating among bidders and deliberately lower auction bids.
At the same time, Article 10, paragraph 1, of the "Regulations of the Supreme People's Court on Several Issues Concerning Online Judicial Auctions of People's Courts" stipulates that even in the era of online auctions, the reserve price is required to be determined, and the reserve price is the starting price.
Does the auctioneer have the right to break the contract?
Article 31 of my country's Auction Law stipulates: If the auction object is handed over by the consignor according to the agreement, after the auction is completed, the consignor shall hand over the auction object to the buyer. Therefore, Fu Jian believes that the auctioneer cannot refuse to perform the contract due to price issues and should conduct transactions in accordance with the requirements of the contract. If the bidder refuses to perform its responsibilities, the bidder has the right to require the auctioneer to bear liability for breach of contract.
According to lawyer Zhang Jiarong, in this dispute, the auctioneer’s breach of contract was inappropriate. According to Article 24 of the "Regulations of the Supreme People's Court on Several Issues Concerning Online Judicial Auctions of People's Courts": If the buyer regrets the auction after the auction is completed, the deposit paid will not be returned, and will be used to pay for the loss of expenses incurred by the auction, make up for the difference between the re-auction price and the original auction price, and offset the debts of the person subject to execution in this case and the debts of the person subject to execution related to the auctioned property.
Based on this, Zhang Jiarong analyzed that although this article is intended to impose requirements on bidders, according to the principles of fairness and good faith, if the client regrets, it constitutes a fundamental breach of contract and should bear liability for damages.
Zhang Jiarong reminded that once the auction is successful and the client cancels the auction, it is recommended that the bidder retain relevant evidence as soon as possible, report complaints to the auction platform first, and seek platform intervention. If negotiation fails, file a lawsuit or arbitration with a judicial authority to safeguard your legitimate rights and interests.
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