Amazon Business Solutions Agreement Allowing Confiscation of Seller Funds Held Unenforceable

Amazon Sellers Attorney, a lawyer-supervised suspension appeal service, announced today that a Washington arbitrator has held section 2 of Amazon’s Business Solutions Agreement, which allows Amazon (AMZN) to hold funds indefinitely if they suspect the third-party seller sold inauthentic products, is not enforceable and ordered Amazon to release the third-party seller’s funds.  

In an arbitration against Amazon.com, LLC brought by Mobile Galaxy, LLC, the arbitrator struck down a provision of Amazon’s Business Solutions Agreement as a contract of adhesion, which, the arbitrator ruled, was subject to Washington law providing that all contracts were subject to interpretation under the implied covenant of good faith and fair dealing.

Mobile Galaxy was a third-party seller under Amazon’s Fulfillment by Amazon (FBA) program, whereby third-party sellers deliver their inventory to Amazon, which takes the responsibility of storage, shipping and delivery of the inventory for fees.  The provision in question, section 2, purports to allow Amazon to confiscate funds if, in their discretion, the seller’s account has been used to engage in deceptive, fraudulent, or illegal activity, or to repeatedly violate Amazon’s policies.  

Amazon deactivated the seller’s account because of complaints received by customers about the condition of the seller’s products sold on Amazon, and held on to over $93,000 in proceeds, claiming the right to do so indefinitely under the Business Solutions Agreement and, alternatively, as liquidated damages.

The arbitrator held the contract was a contract of adhesion, in that it was not subject to negotiation.  He ruled that sellers on Amazon are left with the Hobsin’s choice of “take it or leave it,” and that the contract allowed Amazon to keep all revenues whether legitimate or not, and was, therefore, an unenforceable penalty clause and that Amazon had retained and planned to use the sales proceeds for its own purposes.  He ruled that Amazon had not proven it had been damaged by the seller and had no right to retain the seller’s sale proceeds.

“Arbitration awards are generally not citeable as precedent, but this award is a great victory for sellers, who have had millions of dollars in funds withheld and confiscated by Amazon with little or no evidence,” said Kenneth Eade, Mobile Galaxy’s attorney.  

About Amazon Sellers Attorney

Amazon Sellers Attorney is an Amazon appeal service, supervised by lawyers, which serves third-party sellers worldwide with issues of suspension of their Amazon seller accounts and deactivation of listings through its website at www.amazonsellers.attorney. The firm provides 24-hour service to its customers by live chat, telephone, and email, and free appeal consultations.  Its current supervising attorney, Kenneth Eade, accepted representation of Mobile Galaxy after the company had lost its appeal for the reinstatement of its Amazon seller account and restoration of sales proceeds.  

Contact Information

Kenneth Eade

Supervising Attorney

Amazon Sellers Attorney, Ltd.

(1) 888 806 2440

info@amazonsellers.attorney