EcommerceBytes-NewsFlash, Number 121 - July 11, 2001     1 of 3

Bidville Files Breach of Contract Suit Against PayPal

Email This Story to a Friend and NoBidding, Inc. announced today that they have filed a lawsuit against PayPal, Inc. The suit alleges that after breaching a contract with NoBidding, PayPal sent libelous emails to their customers claiming the NoBidding websites were fraudulent. The complaint was filed June 1 in the Eastern District Court of Pennsylvania by attorney George Kounoupis. Case #01-CV-2702 alleges the following:

(Count 1) Breach of Contract
(Count 2) Breach of Implied Contract
(Count 3) Breach of Implied Duty of Good Faith and Fair Dealing
(Count 4) Promissory Estoppel
(Count 5) Fraud and Misrepresentation
(Count 6) Negligent Misrepresentation
(Count 7) Defamation
(Count 8) Commercial and Trade Disparagement
PayPal is the world's largest web-based payment network that allows individuals to send and receive money online and claims to handle billions of dollars in monetary transactions per year. They are reported to process one-fourth of all transactions occurring on eBay.

NoBidding, Inc. opened AuXpal. com on December 6, 2000. AuXpal was an online auction that seamlessly integrated PayPal's payment system into its architecture. Upon the successful close of an auction, funds were automatically transferred from the winning bidder to the seller via their online PayPal accounts. This process eliminated time consuming communications typically experienced by online auction users when negotiating payment methods.

Ed Orlando, president of NoBidding, Inc., claims that PayPal notified him five days before AuXpal's opening that they could no longer support the project. On opening day, PayPal completely blocked AuXpal's access to PayPal accounts. "We spent six months developing AuXpal technology and were in constant contact with PayPal representatives. They knew exactly how our system worked and explicitly approved it each step of the way," Orlando said. "Pulling out at the last minute had devastating consequences, especially for the eight million PayPal members that would have benefited from this unique service."

The AuXpal website continues to operate as ( and is the second largest online auction next to rival, eBay. "Bidville quickly became a major contender in the online auction space," Orlando adds. "It is hard to imagine where we would be now if PayPal delivered on its promises." Although Bidville does not use an integrated payment system as designed, patents are pending.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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