Why don't retailers have to honour misprices?
Hola amigos! It is I, Len Dastard, full time litigation executive and part time pretend lucha libre! I get my kicks from assisting the fearless consumer. There is nothing that Len wouldn’t do for you. Believe that.
There is always some confusion as to the rights of the consumer when a retailer offers an item at a price which is clearly incorrect. Now seems like the perfect opportunity for me to give you all a quick recap following this deal found over at HUKD. Member paul124 posted a deal for a Panasonic Viera 50" 3D plasma TV for just £199. The actual price, we now know, should have actually been £599 (reduced from £1099). Many people got wind of the £199 price and placed a speculative order. Surely they didn't believe that they would get the item at that price? Orders were placed and then swiftly cancelled with M&S claiming that there had been an error. Members were obviously disgruntled and some went on the attack against M&S claiming that they were the owners of this television and M&S should be sending these out.
Items on the internet or in a shop are known as "invitations to treat" as opposed to "offers to sell". There needs to be a clear distinction between the two otherwise there will possibly be many claims for potential breaches of contract. One of the easiest examples of an "offer to sell" would be a ticket machine within a car park. It is offering you the chance to park your car in exchange for a fee. By you placing your money in the machine you are showing a clear acceptance of their offer. There is therefore no chance to negotiate. An "invitation to treat" is a way of letting people know that they are willing to receive offers. The key difference is that the other party has the opportunity to accept or reject your offer. They therefore do not have to sell you the item regardless of how much money you are willing to pay. This is the general position for items in a shop. I won't bombard you with boring case law but one of the well known cases regarding an invitation to treat is Pharmaceutical Society v Boots where Boots were being sued for selling medicines in the absence of having a doctor within the store. They successfully pleaded that they were not selling the items and they had the opportunity of rejecting the sale at the till and the placing of the item in the basket by the consumer doesn't mean that a contract is formed.
The next consideration is at which point is a contract formed when someones shops at a distance. It is always important to get to grips with a retailers Terms and Conditions as this usually explains at which point the retailer would consider themselves to be legally obliged to sending you the item. It is very common that retailers will state that the contract is formed at the point of despatch so that they can ratify the transaction and correct any errors. Going back to the above deal, these are the Terms and Conditions that M&S initially intended to rely on:
Acceptance of your order
Please note that completion of the online checkout process does not constitute our acceptance of your order. Our acceptance of your order will take place only when we dispatch the product(s) or commencement of the services that you ordered from us.
As you can see from the above, M&S were, by their own Terms, not legally obliged to honour the misprice. However, after much effort on the part of the disgruntled customers, they gave in and honoured many of the orders and members have started to receive their televisions. Hooray! However, retailers do not always "give in" as can be seen in this example. Another misprice but this time from Next. Two small sofas for just £98 from £1300. Many members placed an order and Next are point blank refusing to honour. Slightly different wording from their Terms but they also confirm that the contract is formed when the item is shipped.
Many disgruntled consumers say that this particular Term is grossly unfair and wonder whether or not it is legally enforceable. I have made the point in previous articles but I think it bears repeating. Retailers deserve a certain level of protection for these eventualities. Is it fair that a mistake should be punished to the extent it would be if the term was made unfair and the retailer could therefore not rely on it? Consumers do get plenty of protection from the Sale of Goods Act 1979 and the Distance Selling Regulations 2000 (amongst others). The consequences could be dire for retailers if it was ever made unlawful.
What are your thoughts? Are consumers getting too greedy or should retailers be hung out to dry for their mistakes?
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