California Court of Appeal Issues Decision on What Constitutes an "Offer" in an Online Auction

The California Court of Appeal recently issued a decision on the issue of what constitutes an "offer" in an online auction. The dispute centered around the domain name Golf.tv, which was being offered in an auction by the defendant, dotTV Corporation (TVC). TVC registers .tv domain names for a fee. It acquired the top-level domain name "tv" through an agreement with the island nation of Tuvalu, which owns the rights to this top level country domain name. The Court came to the conclusion that by offering registration of the name through its website, the defendant "intended to effectuate transfer of the Golf.tv domain name to the person or entity that submitted the highest bid". Offering the name at auction was an offer, and plaintiff's bid was an acceptance, conditioned on there being no higher bids. Since the plaintiff accepted the offer precisely as it was made, and no one submitted a higher bid, a contract resulted between the parties. The Court rejected the argument by the defendant that the website posting was not an offer but a solicitation for an offer, much like a general advertisement, by noting that the problem with such an argument is that "an advertisement can constitute an offer, depending on how it is phrased and perhaps on other circumstances". To view a copy of the case (PDF format), visit: http://www.courtinfo.ca.gov/opinions/documents/B151987.PDF.