Generally speaking, unilateral provisions in contracts render the contract unenforceable by the party they benefit. The fundamental principal behind common law

Generally speaking, unilateral provisions in contracts render the contract unenforceable by the party they benefit. The fundamental principal behind common law contracts is the "bargain principal". There must be some "consideration" paid by both parties before a contract is valid (I will give you this, in consideration for your giving me that). A clause in a contract that said, "we have the right to breach this contract at any time we choose" would render the contract void, because there is no "bargin" involved. Such types of promise (a promise to give something with nothing in return) are called "charity" and are not enforced by law. You can tell Jery Lewis, "I promise to give you $20 at your next telethon", but he can't sue you if you don't pay. So... that means that the either: 1) The provision in the contract can't mean "we have the write to breach whenever we feel like it" 2) or, that the TOS are unenforceable. The wording in the TOS is designed specifically to not mean "we can breach whenever we want", but instead to mean "if you sell counterfeit goods through our service we will destroy them and not refund your money". The words "we ... reasonably believe the item you sold is counterfeit" were deliberately chosen for this purpose. The fact that paypal can use its sole discretion just tips the scales in their favor. If they have reasonable evidence that something is fake, then they can destroy it, even if they haven't done due diligence to prove it's a fake. The question comes down to wether or not paypal had reason to believe the item was counterfeit. Their are certain cases where only a customer complaint would be sufficient to establish a "reasonable believe". For example, if Picasso bought a painting that was said to be a Picasso original, and he called paypal and said "I didn't paint this, it's a fake", they would definetly be within their rights if they distroyed it, even if further investigation could have revealed he was lying. In this particular case... you could potentially argue that the customer's complaint was in no way sufficient for paypal to reach a "reasonable believe". This does make the whole thing wildly open to judicial interpretation, however.