It falls under contract law, and yes they're required to honour those orders as it fulfils all the requirements of a contract. A mistake is no defence in civil proceedings for contract violation. Once you've 'purchased' an item, regardless of whether the money has been deducted from your credit card yet (Amazon charges on dispatch, but has to honour the price made at the point-of-sale) or not, you've both agreed to a contract to exchange a product for currency. A company not delivering a product is just like a customer not paying, only it's much easier to file a lawsuit against a company than an individual.
Considering they could have had to pay $1.6m + class action legal fees means they saved a lot of money by simply taking the loss.
Pretty sure this is not true at all. If they take your money and do nothing, that's a problem. If they take your money, say "oh fuck, we don't have that item at that price anymore", and give you your money back, everything is fine. If they never take your money (as they don't charge you until they actually ship the order), then they have even less obligation.
What they probably can't do is ship you your stuff for $50, find the mistake a month later, and then silently charge your credit card the $500 difference. And they probably can't ask you to send the stuff back.
After money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages.
If they take your money and don't have the item, they have to refund you or provide a like product at the same or discounted price, cannot be more than 10% more than the listed price or it violates another subsection of the law for price estimates. Or they're back into the above and $250,000 in punitive damages.
If they don't take your money, they're open for a suit for advertising the product and not providing it at the listed price. At this point it is merely on the judges discretion, and doesn't fall under the CPA. However, considering every product was capped at $50 and no one noticed, they would really be up shit creek without a paddle. It's a gross mistake and they made no attempt to reconcile the error (you know by shutting down the site) until 6am because they made no effort to check their pricing accuracy.
Like I said, they'd be open to a $1.6m lawsuit + the cost of legal fees and considering they obviously made no effort to check their prices, I don't see how they would have a defence. This isn't one little item that slipped through the net, it's the whole fucking store including the vinyl floor tiles!
There's no guarantee they would have to pay, it would be entirely up to a judge, but considering they obviously have no practices or policies in place to ensure these things are caught means they'd have no defence in court saying 'it was a mistake' because it wasn't, it was a complete lack of a price accuracy policy.
Are you a Canadian lawyer? The alleged laws you describe are quite far from the practice in other common law countries, but are quite similar to the misconceptions non-lawyers have about the law in most other common law countries, so I'm skeptical.
>After money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages.
You're absolutely wrong.
There is a strong protection here in Ontario against liability for technical errors, and it has come into effect multiple times (always with entitled people thinking they won the lottery writing angry letters to the editor decrying their grievous injury). So long as they reverse any charges, neither party is out anything and no one has any entitlement to the result of a mistake.
Just an FYI, here is the relevant terms and conditions:
"TYPOGRAPHICAL ERRORS
In the event a product is listed at an incorrect price or with incorrect information due to typographical error or error in pricing or product information received from our suppliers, we shall have the right to refuse or cancel any orders placed for product listed at the incorrect price. We shall have the right to refuse or cancel any such orders whether or not the order has been confirmed and your credit card charged. If your credit card has already been charged for the purchase and your order is canceled, we shall immediately issue a credit to your credit card account in the amount of the charge."
Terms and conditions are very much legally binding in the case we are discussing (online sales) - you are explicitly offered them as the contractual terms of sale.
What T&C can't do is rescind the basic consumer rights offered under law
electromagnetic contends that the "basic consumer rights offered under law" include the obligation for the seller to have an infinite number of any item in stock and ready to ship at whatever price the website happens to say, even if it's an obvious mistake.
Well I've just been skimming the books on my law shelf (Google was completely unhelpful) and they seem to back up what we've been saying so far; there is no provision under current consumer law to force the retailer into honouring it (actually there is sort of one but it's wording basically says "unless the retailer says otherwise..." etc.)
If I remember my law class in the UK, there is no legal reason to ship the goods in this situation. The price online is only one that is offered. The buyer giving money to the retailer is considered an acceptance of the offer, but the contract is not binding unless the retailer then displays that they still wish to go ahead with the transaction on those terms. My lecturer always referred to it as the courts wanting to see "a meeting of minds."
This leaves online retailers (and brick and mortar that sticker an item wrong) the time to change anything before the item is placed in the buyer's hands, and the court will look particularly down on a transaction where the buyer could not have reasonably expected the transaction to be valid (like buying a TV for 1 GBP).
My understanding was that much of contract law in the US was based on UK law, but I am by no means a lawyer in either jurisdiction :)
It's request for offers of purchase from customers. When buyer puts item in the online basket and fills in his details he is making an offer to the seller that he wants to purchase the goods at the given price. If the seller sends the buyer confirmation email stating that he actually wants to deliver the good (automatic notifications about registering buyers offer do not count) then the contract with all the following obligations is formed.
I last had this discussion sometime last year when Argos did much the same mistake here in the UK - but cancelled the orders. At the time a contract lawyer weighed in and explained there were various caveats and so forth that allowed them to do this.
(certainly prior to taking the money then they are able to simply cancel the order at any time. After that I suppose it depends on the country/contract law involved)
I know here in Ontario, they can cancel but they are legally open for violating the consumer protection act for misleading practices and a mistake is no protection in court.
An agreement between stores, and I believe one Amazon.ca upholds, is that they offer you the product at the original price with a $10 discount/credit (if it costs more than $10 - free if it costs less than $10). However, this is just a practice to placate the consumer as on gross mispricings like a $1000 TV for $5 people know they're taking advantage and will either be happy to take the $10 off, or will cancel the agreement thus removing all legal liability on the company. However, if the $5 had entered the till and a manager came running out trying to stop you leave with the TV, well you just got a $5 TV and if they stop you, they get up to a $250,000 fine and you get yourself a TV. Quite ironically though, if you notify the cashier of the mispricing, most store policies will give you the item for free regardless of price! So the people walking away with the $10 credit are really losing much more than if they had honestly notified a manager.
One of the caveats is that the agreement is generally to sell X number of products at $Y price, and if they don't have the quantity of products to supply the amount of orders they can actually cancel the orders and later reoffer them at a corrected price, which is probably what Argos got away with.
Are Zappos based in Ontario (I wasn't sure if that is why you mentioned there in particular?).
Ultimately it will depend on where the company is based; but for the most part mispriced items are usually explicitly accounted for in the Terms and Conditions of sale you agree to (I know that was part of what Argos used over here).
I seem to recall there was a legal argument over it.. because in the real world if a shop advertises a $10 for $1 there is no legal requirement (at least not here) for them to sell it at that price - if they notice. If they accept your offer to buy at the lower price then there is nothing they can do.
The argument was that digital sales worked in a different way (and that manually approving each sale like in a shop was infeasible) so I am pretty sure a lot of work went into making sure the law applied to when the item was shipped. I noticed Amazon still don't take money till they ship the item; so it could be this was never actually resolved.
(by the way I can't find any references to the laws you mention - got any links?)
If what you have said is true then the opposite action must also be true. (example based on my understanding of the sale of goods act).
You walk into a store and walk up to the till and ask to buy something, then at that moment the person behind the till tells you the price is wrong and it's actually 3 times that. Buy saying you wanted to buy it you are then contractually obliged under consumer law to then pay for the goods.
Doesn't sound right now does it.
Argos didn't get away with anything, they are no requirement under the sale of goods act to honor the price and can cancel the order (effectively they are refusing your business which is how it actually works but is obviously not worded as such for politeness) if they choose to.
Comments
It falls under contract law, and yes they're required to honour those orders as it fulfils all the requirements of a contract. A mistake is no defence in civil proceedings for contract violation. Once you've 'purchased' an item, regardless of whether the money has been deducted from your credit card yet (Amazon charges on dispatch, but has to honour the price made at the point-of-sale) or not, you've both agreed to a contract to exchange a product for currency. A company not delivering a product is just like a customer not paying, only it's much easier to file a lawsuit against a company than an individual.
Considering they could have had to pay $1.6m + class action legal fees means they saved a lot of money by simply taking the loss.
Pretty sure this is not true at all. If they take your money and do nothing, that's a problem. If they take your money, say "oh fuck, we don't have that item at that price anymore", and give you your money back, everything is fine. If they never take your money (as they don't charge you until they actually ship the order), then they have even less obligation.
What they probably can't do is ship you your stuff for $50, find the mistake a month later, and then silently charge your credit card the $500 difference. And they probably can't ask you to send the stuff back.
After money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages.
If they take your money and don't have the item, they have to refund you or provide a like product at the same or discounted price, cannot be more than 10% more than the listed price or it violates another subsection of the law for price estimates. Or they're back into the above and $250,000 in punitive damages.
If they don't take your money, they're open for a suit for advertising the product and not providing it at the listed price. At this point it is merely on the judges discretion, and doesn't fall under the CPA. However, considering every product was capped at $50 and no one noticed, they would really be up shit creek without a paddle. It's a gross mistake and they made no attempt to reconcile the error (you know by shutting down the site) until 6am because they made no effort to check their pricing accuracy.
Like I said, they'd be open to a $1.6m lawsuit + the cost of legal fees and considering they obviously made no effort to check their prices, I don't see how they would have a defence. This isn't one little item that slipped through the net, it's the whole fucking store including the vinyl floor tiles!
There's no guarantee they would have to pay, it would be entirely up to a judge, but considering they obviously have no practices or policies in place to ensure these things are caught means they'd have no defence in court saying 'it was a mistake' because it wasn't, it was a complete lack of a price accuracy policy.
Are you a Canadian lawyer? The alleged laws you describe are quite far from the practice in other common law countries, but are quite similar to the misconceptions non-lawyers have about the law in most other common law countries, so I'm skeptical.
It's a gross mistake and they made no attempt to reconcile the error (you know by shutting down the site) until 6am
Did you read the article? They shut down the site when they saw the problem, which occurred between midnight and 6am, a popular time for sleeping.
Futureshop has repeatedly refused to uphold mis-priced items in Ontario.
>After money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages.
You're absolutely wrong.
There is a strong protection here in Ontario against liability for technical errors, and it has come into effect multiple times (always with entitled people thinking they won the lottery writing angry letters to the editor decrying their grievous injury). So long as they reverse any charges, neither party is out anything and no one has any entitlement to the result of a mistake.
Just an FYI, here is the relevant terms and conditions:
"TYPOGRAPHICAL ERRORS
In the event a product is listed at an incorrect price or with incorrect information due to typographical error or error in pricing or product information received from our suppliers, we shall have the right to refuse or cancel any orders placed for product listed at the incorrect price. We shall have the right to refuse or cancel any such orders whether or not the order has been confirmed and your credit card charged. If your credit card has already been charged for the purchase and your order is canceled, we shall immediately issue a credit to your credit card account in the amount of the charge."
http://www.6pm.com/terms-of-use
If you are going to talk like a lawyer you should act like a lawyer and read the fine print.
Terms and conditions aren't legally binding, perhaps you should read the law.
Terms and conditions are very much legally binding in the case we are discussing (online sales) - you are explicitly offered them as the contractual terms of sale.
What T&C can't do is rescind the basic consumer rights offered under law
electromagnetic contends that the "basic consumer rights offered under law" include the obligation for the seller to have an infinite number of any item in stock and ready to ship at whatever price the website happens to say, even if it's an obvious mistake.
Well I've just been skimming the books on my law shelf (Google was completely unhelpful) and they seem to back up what we've been saying so far; there is no provision under current consumer law to force the retailer into honouring it (actually there is sort of one but it's wording basically says "unless the retailer says otherwise..." etc.)
IANAL so that's just how I read it.
This depends on the country.
If I remember my law class in the UK, there is no legal reason to ship the goods in this situation. The price online is only one that is offered. The buyer giving money to the retailer is considered an acceptance of the offer, but the contract is not binding unless the retailer then displays that they still wish to go ahead with the transaction on those terms. My lecturer always referred to it as the courts wanting to see "a meeting of minds."
This leaves online retailers (and brick and mortar that sticker an item wrong) the time to change anything before the item is placed in the buyer's hands, and the court will look particularly down on a transaction where the buyer could not have reasonably expected the transaction to be valid (like buying a TV for 1 GBP).
My understanding was that much of contract law in the US was based on UK law, but I am by no means a lawyer in either jurisdiction :)
In Poland price online is not even an offer.
It's request for offers of purchase from customers. When buyer puts item in the online basket and fills in his details he is making an offer to the seller that he wants to purchase the goods at the given price. If the seller sends the buyer confirmation email stating that he actually wants to deliver the good (automatic notifications about registering buyers offer do not count) then the contract with all the following obligations is formed.
I last had this discussion sometime last year when Argos did much the same mistake here in the UK - but cancelled the orders. At the time a contract lawyer weighed in and explained there were various caveats and so forth that allowed them to do this.
(certainly prior to taking the money then they are able to simply cancel the order at any time. After that I suppose it depends on the country/contract law involved)
I know here in Ontario, they can cancel but they are legally open for violating the consumer protection act for misleading practices and a mistake is no protection in court.
An agreement between stores, and I believe one Amazon.ca upholds, is that they offer you the product at the original price with a $10 discount/credit (if it costs more than $10 - free if it costs less than $10). However, this is just a practice to placate the consumer as on gross mispricings like a $1000 TV for $5 people know they're taking advantage and will either be happy to take the $10 off, or will cancel the agreement thus removing all legal liability on the company. However, if the $5 had entered the till and a manager came running out trying to stop you leave with the TV, well you just got a $5 TV and if they stop you, they get up to a $250,000 fine and you get yourself a TV. Quite ironically though, if you notify the cashier of the mispricing, most store policies will give you the item for free regardless of price! So the people walking away with the $10 credit are really losing much more than if they had honestly notified a manager.
One of the caveats is that the agreement is generally to sell X number of products at $Y price, and if they don't have the quantity of products to supply the amount of orders they can actually cancel the orders and later reoffer them at a corrected price, which is probably what Argos got away with.
Are Zappos based in Ontario (I wasn't sure if that is why you mentioned there in particular?).
Ultimately it will depend on where the company is based; but for the most part mispriced items are usually explicitly accounted for in the Terms and Conditions of sale you agree to (I know that was part of what Argos used over here).
I seem to recall there was a legal argument over it.. because in the real world if a shop advertises a $10 for $1 there is no legal requirement (at least not here) for them to sell it at that price - if they notice. If they accept your offer to buy at the lower price then there is nothing they can do.
The argument was that digital sales worked in a different way (and that manually approving each sale like in a shop was infeasible) so I am pretty sure a lot of work went into making sure the law applied to when the item was shipped. I noticed Amazon still don't take money till they ship the item; so it could be this was never actually resolved.
(by the way I can't find any references to the laws you mention - got any links?)
Are Zappos based in Ontario
No. They are based near Las Vegas.
If what you have said is true then the opposite action must also be true. (example based on my understanding of the sale of goods act).
You walk into a store and walk up to the till and ask to buy something, then at that moment the person behind the till tells you the price is wrong and it's actually 3 times that. Buy saying you wanted to buy it you are then contractually obliged under consumer law to then pay for the goods.
Doesn't sound right now does it.
Argos didn't get away with anything, they are no requirement under the sale of goods act to honor the price and can cancel the order (effectively they are refusing your business which is how it actually works but is obviously not worded as such for politeness) if they choose to.