Below is part 1 of 2 parts, Paypal's User Agreement that eeryone should be made aware of BEFORE using Paypal.  Paypal can seize funds from your account if a transaction is disputed.  Please read.  Many dont bother but you all should be aware of this.

User Agreement for PayPal™ Service
 

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The following policies (showing their last updated date) are incorporated into this Agreement by reference and provide additional terms and conditions related to specific PayPal services we offer:

Privacy Policy (June 7, 2007)
Closing Accounts and Limiting Account Access (May 18, 2006)
Electronic Fund Transfer Rights and Error Resolution Policy (March 17, 2006)
PayPal Buyer Complaint Policy and PayPal Buyer Protection Policy (October 25, 2007)
Payments (Sending, Receiving, and Withdrawals) Policy (March 8, 2007)
Premier and Business Account Policy (November 4, 2005)
Fees Policy (November 2, 2006)
PayPal Shops Policy (September 26, 2003)
Acceptable Use Policy (August 30, 2007)
PayPal Recurring Payments and Billing Agreement (May 3, 2007)
Merchants Gift Certificates Policy (January 11, 2006)

Each of these policies may be changed from time to time and are effective immediately after we post the changes on our Service, except our Privacy Policy for which we will provide you with thirty days prior notice. In addition, when using particular Services, you agree that you are subject to any policies or rules which are posted in conjunction with those Services. All such posted policies or rules are hereby incorporated by reference into this Agreement.

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THE FOLLOWING DESCRIBES THE TERMS ON WHICH PAYPAL OFFERS YOU ACCESS TO OUR SERVICES.

This User Agreement ("Agreement") is a contract between you and PayPal CA Limited. and applies to your use of the PayPal™ payment service and any related products and services available through www.paypal.com (collectively the "Service"). If you do not agree to be bound by the terms and conditions of this Agreement, please do not use or access our Services.

You must read, agree with, and accept all of the terms and conditions contained in this Agreement and the Privacy Policy, which include those terms and conditions expressly set out below and those incorporated by reference, before you may become a member of PayPal. We strongly recommend that, as you read this Agreement, you also access and read the information contained in the other pages and websites referred to in this document, as they may contain further terms and conditions that apply to you as a PayPal user. Please note: underlined words and phrases are links to these pages and websites. By accepting this Agreement, you also agree that your use of other PayPal websites and Services will be governed by the terms and conditions posted on those websites.

For additional information about the Service and how it works, please also consult the PayPal Help Center.

We may amend this Agreement at any time by posting the amended terms on our site. Except as stated below, all amended terms shall be effective 30 days after they are initially posted on our site. Upcoming changes will be posted on the "Policy Updates" page, accessible from "Policy Updates" link on the Account Overview page once you have logged in. In addition, you can set your Preferences to receive email notification of all policy updates. You may review the current Agreement prior to initiating a transaction at any time at our User Agreement page.

In this Agreement, "you" or "your" means any person or entity using the Service ("Users"). Unless otherwise stated, "PayPal," "we" or "our" will refer collectively to PayPal, Inc. and its subsidiaries including PayPal CA Limited and PayPal Asset Management Inc. Unless otherwise specified, all references to a "bank" in this Agreement include savings associations and credit unions, and all references to a "credit card" include Visa- and MasterCard-branded debit cards.

This agreement was last modified on October 25, 2007.

Eligibility. In order to use the Service, you must register for a Personal, Premier, or Business account. Users may only hold one Personal account and either one Premier or one Business account. Our Services are only available to individuals or businesses that can form legally binding contracts under applicable law. Without limiting the foregoing, our Service is not available to minors (under 18), persons who are suspended from our Service, or to persons who present an unacceptable level of credit risk. In order to receive credit card funded payments or use the Service to conduct business or in conjunction with a business, you must upgrade to or register for a Premier or Business account.

The Legal Relationship between You and PayPal.

2.1 Agency Relationship. PayPal acts as a facilitator to help you accept payments from and make payments to third parties. We act as your agent based upon your direction and your requests to use our Services that require us to perform tasks on your behalf. PayPal will at all times hold your funds separate from its corporate funds, will not use your funds for its operating expenses or any other corporate purposes, and will not voluntarily make funds available to its creditors in the event of bankruptcy or for any other purpose. You acknowledge that (i) PayPal is not a bank and the Service is a payment processing service rather than a banking service, and (ii) PayPal is not acting as a trustee, fiduciary or escrow with respect to your funds, but is acting only as an agent and custodian.

You are not required to carry a balance in your PayPal account in order to use the Service. PayPal will pool your funds together with funds from other Users, and will place those funds in accounts at one or more financial institutions ("Pooled Accounts").

You agree that you will not receive interest or other earnings on the funds that PayPal handles as your agent. PayPal may earn interest on those funds, or may receive a reduction in fees or expenses charged for banking services by the banks that hold your funds.

By initiating and sending payments through the Service or adding funds to your balance, you appoint PayPal as your agent to obtain the funds on your behalf and to transfer the funds to the recipient that you designate or to a Pooled Account, subject to the terms and restrictions of this Agreement. When you send a payment, until that payment is accepted by the recipient (which may occur instantly), you remain the owner of those funds and PayPal holds those funds as your agent, but you will not be able to withdraw those funds or send the funds to any other recipient unless the initial transaction is cancelled.

By receiving payments through the Service, you appoint PayPal as your agent to cause the funds to be deposited on your behalf in the Pooled Accounts until you further instruct PayPal with respect to the transmission of your funds. Through the PayPal website, you may provide instructions to withdraw the funds or transfer the funds to a third party, in each case subject to the terms and restrictions of this Agreement. If you receive a notice that a payment has been sent to you through PayPal but you have not registered for the Service, PayPal will not become your agent and you will have no claim to those funds unless and until you register for the Service and indicate your acceptance of the payment.

2.2 PayPal is only a Payment Service Provider. PayPal acts as a payment service provider by creating, hosting, maintaining and providing our Service to you via the Internet. We do not have any control over the products or services that are paid for with our Service. We cannot ensure that a buyer or a seller you are dealing with will actually complete the transaction.

2.3 Identity Authentication. We use many techniques to identify our users when they register on our site. Verification of Users is only an indication of increased likelihood that a User's identity is correct. You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your registration. This may include ordering a credit report and performing other credit checks or verifying the information you provide against third party databases. However, because user verification on the Internet is difficult, PayPal cannot and does not guarantee any user's identity.

2.4 Release. In the event that you have a dispute with one or more users, you release PayPal (and our officers, directors, agents, subsidiaries, joint ventures and employees) from any and all claims, demands and damages (actual and consequential) of every kind and nature arising out of or in any way connected with such disputes.

2.5 No Warranty. WE, OUR PARENT, SUBSIDIARIES, EMPLOYEES AND OUR SUPPLIERS PROVIDE OUR SERVICES "AS IS" AND WITHOUT ANY WARRANTY OR CONDITION, EXPRESS, IMPLIED OR STATUTORY. WE, OUR PARENT, SUBSIDIARIES, EMPLOYEES AND OUR SUPPLIERS SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. PayPal shall make reasonable efforts to ensure that requests for electronic debits and credits involving bank accounts, credit cards, and check issuances are processed in a timely manner and but we make no representations or warranties regarding the amount of time needed to complete processing because our Service is largely dependant upon many factors outside of our control, such as delays in the banking system or the Canada or international mail service. Some countries do not allow the disclaimer of implied warranties, so the foregoing disclaimer may not apply to you. This warranty gives you specific legal rights and you may also have other legal rights that vary from state to state.

2.6 Limitation of Liability. EXCEPT IN THE CASE OF DEATH OR PERSONAL INJURY RESULTING FROM NEGLIGENCE, IN NO EVENT SHALL WE, OUR PARENT, SUBSIDIARIES, EMPLOYEES OR OUR SUPPLIERS BE LIABLE FOR LOST PROFITS OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH OUR WEB SITE, OUR SERVICE, OR THIS AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE). Some jurisdictions do not allow the exclusion or limitation of incidental or consequential damages so the above limitation or exclusion may not apply to you.

EXCEPT IN THE CASE OF DEATH OR PERSONAL INJURY RESULTING FROM NEGLIGENCE, OUR LIABILITY, AND THE LIABILITY OF OUR PARENT, SUBSIDIARIES, EMPLOYEES AND SUPPLIERS, TO YOU OR ANY THIRD PARTIES IN ANY CIRCUMSTANCE IS LIMITED TO THE ACTUAL AMOUNT OF DIRECT DAMAGES.

2.7 Indemnification. You agree to indemnify and hold PayPal, its parent, subsidiaries, affiliates, officers, directors and employees harmless from any claim or demand (including lawyers’ fees) made or incurred by any third party due to or arising out of your breach of this Agreement or the documents it incorporates by reference, or your violation of any law or the rights of a third party relating to your use of the Service.

2.8 Liability for Violations of the Acceptable Use Policy. If you engage in the following behavior, PayPal may hold your funds up to 180 Days and fine you as explained below.

Using the PayPal service to receive payments for any sexually oriented or obscene materials or services in violation of the Acceptable Use Policy.

Using the PayPal service to receive payments for any narcotics, other controlled substances, steroids or prescription drugs in violation of the Acceptable Use Policy.

Using the PayPal service to receive payments for wagers, gambling debts or gambling winnings, regardless of the location or type of gambling activity in violation of the Acceptable Use Policy.

Using the PayPal service to receive payments for tobacco products in violation of the Acceptable Use Policy.

You and PayPal agree that the damages that PayPal will sustain as a result of the behavior outlined above will be substantial, including (without limitation) fines and other related expenses from its payment processors and service providers, but may be extremely difficult and impracticable to ascertain. In the event that you engage in such activities, then PayPal may fine you up to $2,500.00 USD for each such violation and/or PayPal may take legal action against you to recover losses that are in excess of the amount fined. You acknowledge and agree that a fine up to $2,500.00 USD is presently a reasonable and genuine minimum estimate of PayPal’s damages, considering all currently existing circumstances, including (without limitation) the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult. You agree that PayPal is entitled to deduct such amounts directly from any existing balance in the offending account, or any other PayPal account owned by you.

If you use the PayPal service in a manner that violates the Acceptable Use Policy, including but not limited to the four categories described above, your account will be subject to limitation or immediate termination, as stated in the Closing Accounts and Limiting Account Access Policy.

You further understand that, if you use the PayPal service in a manner that violates the Acceptable Use Policy, including but not limited to the four categories described above, PayPal may incur substantial liability and/or suffer significant damages, including (without limitation) fines and other related expenses from its payment processors and service providers. By selling goods or services (including access to content) in contravention of the Acceptable Use Policy or the Restricted Activities section of this User Agreement (currently Section 6.2), you acknowledge liability to PayPal for any and all damages suffered by PayPal. Without limiting the foregoing, you agree to reimburse PayPal for any and all costs, expenses, and fines levied on PayPal by its payment processors and/or service providers as a result of your activities.

You agree that, if either you or PayPal commence litigation or arbitration in connection with this paragraph, the prevailing party is entitled to recover reasonable lawyers’ fees and any other costs incurred in such proceeding in addition to any other relief to which the prevailing party may be entitled.

Fees. All fees are set forth in the Fee Schedule. All fees will be assessed in the currency of the payment. Additional information about PayPal's fees is available in the Fees Policy. Your account and all transactions are made and displayed in Canadian Dollars unless otherwise specified and may be subject to exchange rates.

Receiving Payments.

4.1 Credit Card Funded Payments. All PayPal accounts can receive credit card funded payments, however Personal Accounts may only receive a limited number of credit card payments per twelve month period for a fee. Credit card payments in excess of the limit may be accepted by upgrading to a Premier or Business Account, or they will have to deny the payment. Personal Accounts may receive non-credit card funded payments for free. By accepting a credit card payment, you agree that you are responsible for the payment if it is reversed. If such reversal occurs on a credit card funded payment made to your account, we will reverse the payment and debit your PayPal account balance to pay for the reversal. If there are insufficient funds in your PayPal balance, you agree to reimburse PayPal through other means, as described in the Payments (Sending, Receiving, and Withdrawing) Policy.
Personal, Premier, and Business Accounts may accept an unlimited number of PayPal payments funded by credit cards which are also sent via Skype. Please see the Fees Policy for any applicable fees related to Skype payments.

4.2 Removal of Expired Cards. We will notify you of expired credit cards in your account and provide you the opportunity to update those cards before we remove them as a funding source in your account.

4.3 Withdrawals. To withdraw money from your PayPal account we require you to provide PayPal with a number of forms of identification as further described and protected in our Privacy Policy. We require this information to authenticate your identity and to determine how much you may withdraw from your account per month. We may limit withdrawals and require additional information from you depending upon your country of residence, credit rating, and other factors. Generally, in order to withdraw more than the equivalent of $500.00 USD per month, we require you to complete some authentication procedures, such as confirming: your email address, your bank account, and your national identity number. Importantly, if you are an Non-U.S. User and do not reside in a Withdrawal Country, please note that you may not be able to withdraw funds from your PayPal Account and should therefore only accept payments if you know you will send payments in equal amounts out of your account. For more details and guidelines about withdrawals, please refer to our Payments Policy.

4.4 Payment Review. Payment Review is a process by which PayPal reviews certain potentially high-risk transactions. If a payment is subject to Payment Review, PayPal will place a hold on the payment and provide notice to the seller to delay shipping the item. PayPal will conduct a review and either clear or reverse the payment. If the payment is cleared, PayPal will provide notice to the seller to ship the item. Otherwise, PayPal will reverse the payment and the funds will be returned to the buyer. All payments that clear Payment Review will be marked Seller Protection Policy eligible. PayPal will provide notices to you by email and/or in the Transaction History tab of your PayPal account.

Sending Payments.

5.1 Sending Payments. In order to send payments through our Service we require you to provide PayPal with a number of forms of identification as further described and protected in our Privacy Policy. We require this information to authenticate your identity and to determine how much you may send with your account. We may require additional information from you depending on your location and other factors. Based on the information you provide, we will determine your Sending Limit. Generally, accounts that have a confirmed email address and credit card on file may send up to an equivalent of $1,200.00 USD. Accounts that are Verified by adding and confirming a bank account will receive a higher Sending Limit or no limit at all.

5.2 Enrolling in the Expanded Use Program. To obtain your Expanded Use Number, you must pay a Expanded Use Fee, log in to your PayPal account, and enter the four-digit Expanded Use Number associated with the charge. After you have successfully entered your Expanded Use Number, you will receive a bonus on the next PayPal payment you send. This bonus may take up to 24 hours to process and be reflected in your PayPal account balance. This Expanded Use Enrollment will be complete and your sending limit lifted if and when you correctly enter your Expanded Use Number on the PayPal website. If you remove the funding source (e.g. the bank account or credit card) used to enroll in the Expanded Use Program, PayPal may require you to enroll in the Expanded Use Program again.

5.3 Refused Payments. When you send a payment to a third party through our Service, the recipient is not required to accept the payment, even if the recipient is already registered with PayPal. The recipient may return the payment or, in some cases, use the PayPal Service to deny payments that you send. Any payments sent through PayPal that are denied or unclaimed by a recipient will be returned to you on the earlier of: (a) the date of such denial, or (b) 30 days after the date the payment is sent. For more details and guidelines about Sending Payments, please refer to our Payments Policy.

5.4 Electronic Transfers. If you register a U.S. bank account with PayPal, you have the option to make a payment through PayPal that is funded with Instant Transfer or eCheck, and when you initiate an "Add Funds" transaction you are requesting an electronic transfer from your bank account. Upon such request, PayPal will make electronic transfers via the Automated Clearing House (ACH) system from your U.S. bank account in the amount you specify. You agree that such requests constitute your authorization for such transfers. PayPal will never make transfers from your bank account without your authorization. PayPal provides you protection against unauthorized withdrawals from your bank account under the terms of the Electronic Fund Transfer Rights and Error Resolution Policy below.

5.5 PayPal Mobile. PayPal Mobile is a Service that allows you to send and receive payments through your mobile phone. PayPal Mobile is unavailable in certain countries outside Canada. If you use PayPal Mobile, please understand that you are responsible for any fees that your phone service provider charges for SMS, data services, etc.