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Legal obligation to sell?

Am I obligated to sell an item at mismarked price...

     
1:23 am on May 25, 2007 (gmt 0)

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I encountered a problem with a customer today. I recently built a new ecommerce website but when I uploaded the product database some columns were mis-aligned, merged, or something to that effect. This snafu caused some of the product prices to get screwed up. Long story short, A $200 item wound up being listed for $1. Well this customer saw this snafu and tried to place an order for it. I caught the error before the order was processed and called the customer to explain. He was irate over the phone because I wouldn't sell the item for $1. He claims that I am legally obligated to sell the item to him for that price.

I've heard of "Bait and switch" laws before, but am I really obligated to sell this item to him for a buck?

3:16 am on May 25, 2007 (gmt 0)

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What country are you in?
----
In the US and England the law has long held that quoted prices in newspaper ads aren't binding on the seller especially where the error would be obvious to anyone.

Otherwise, an innocent misprint could, say, put a car dealer out of business in a day while giving buyers an undeserved windfall.

4:20 am on May 25, 2007 (gmt 0)

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Do you have any disclaimer on the site for errors, e.g.: While every effort has been made to ensure accuracy, we cannot be responsible for errors, omissions, or misprints. Prices are subject to confirmation and change without notice"

Remember, this is just an example.

4:24 am on May 25, 2007 (gmt 0)

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He claims that I am legally obligated to sell the item to him for that price.

I would ask him to provide the legal documents that show you are liable and you'll gladly do it. He won't, they don't exist (to my knowledge.) By the way, welcome aboard. :-)

4:32 am on May 25, 2007 (gmt 0)

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rocknbil mades an excellant point. Put the proof of burden on the buyer.
8:51 am on May 25, 2007 (gmt 0)

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... and also the burden of proof :)
8:59 am on May 25, 2007 (gmt 0)

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File a case of mental agony and waste of time on user he will buy it from some one else for $1 :)

Just see the disclamair stuff , update it if you already dont have and then point the user to that page if he still pops up

Good luck with website and welcome to WebmasterWorld

9:04 am on May 25, 2007 (gmt 0)

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You've not said what country you live in, or quite how the offer was worded. In many countries your offer of sale is an 'invitation to treat' and not a 'contractual offer'. It is not normally 'bait and switch' unless you are offering an alternative product (i.e. not the same product at a corrected price).

In general, the magic four characters required to clarify this situation are "E&EO", preferably in the footer of every page.

You may be able to diffuse the situation by sending him off to one of your competitors who offers a 'price match' or 'double the difference' type offer!

10:06 am on May 25, 2007 (gmt 0)

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[post edit window addition]

As some people will read this thread in order to try to shore up their plan to deliberately mismark prices...
...I am pretty sure that you'd be in a very dodgy position legally if you didn't correct the price the moment you were informed about it.

10:13 am on May 25, 2007 (gmt 0)

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In short, he is trying to screw you. Play games with him. Take his card number incorrectly, when he calls to complain about non-delivery tell him the card didn't work and take another one, send him a snail mail letter to say the number is wrong, take the first card again, forget to send him the letter in the post, or send it to his card company by mistake....
10:14 am on May 25, 2007 (gmt 0)

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If I were you, I'd not do what oddsod said... not because it wouldn't be fun, but because you would be quickly signifying your agreement to sell at the mismarked price, and you'd be in a whole other kettle of fish then.

I learnt this from dealing with 'cheque in the post' clients... once they've stated that the cheque is in the post they lose their ability to claim that the money isn't owed or the work is substandard, etc.

2:53 pm on May 25, 2007 (gmt 0)

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I'll take the other side of the argument. You offered to sell an item for a price, a third party agreed the price asked and at this point you entered into a contract. He may have a case for breach of contract against you.

otherwise, what is to stop dubious advertisers "mistakenly" advertising products at ridiculously low prices just to ensnare customers?

Matt

3:08 pm on May 25, 2007 (gmt 0)

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He may have a case for breach of contract against you.

Not under U.S. law. Anyone would undertand that $1 charge for a $200 item is a typo.

"The law doesnt like windfalls" (I remember that from Contracts 101... years ago in law school).

3:18 pm on May 25, 2007 (gmt 0)

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the magic four characters required to clarify this situation are "E&EO"

heh, I think that's E&OE :)

I wouldn't waste your time on this, just tell him no and if he wants to take it further he should consult his lawyer.

4:01 pm on May 25, 2007 (gmt 0)

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You do not have an obligation to sell at the misprinted price. A retail transaction is not the same as a contractual agreement.

However, as a concession to an unsatisfied customer, you may want to offer some sort of "make it right" offer. A nominal discount on the item or something like that.

At least that way as a merchant you can show you tried to do something fair.

4:06 pm on May 25, 2007 (gmt 0)

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I used to work at a store (U.S.) and when things were obviously marked way too low by accident on occasion, they refused to sell them at that price. They just told the customers, "Sorry, it was a mistake".
4:11 pm on May 25, 2007 (gmt 0)

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Was his card already charged for $1.00?
4:24 pm on May 25, 2007 (gmt 0)

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You're not obligated to sell it to him for that price. Simply state it was a mistake, offer him free shipping or something. If they are some kind of idiot that spouts of something about suing you, blah blah blah, I'm sure they're going to spend $5000 on attornies to get a $200 product for $1.
5:41 pm on May 25, 2007 (gmt 0)

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A contract exists only when the buyer has made an offer for the goods and the seller has accepted the offer.
6:22 pm on May 25, 2007 (gmt 0)

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The bigger question is, "what if the mistaken price was $150, and should have been $200". Then it's not so obviously a mistake.

In that case, would the seller be "required by law" to make the sale for $150 in the US? What about the UK?

I know it's a hypothetical question, but probably occurs more often than the $1 price tag example.

6:43 pm on May 25, 2007 (gmt 0)

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The answer is a simple No you are not under any law if a mistake is made.

No need for discussions just redo the site email them an error was made that is that.

7:19 pm on May 25, 2007 (gmt 0)

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Was his card already charged for $1.00?

This is a pretty good question, any takers on how the situation changes if the card was charged?

7:38 pm on May 25, 2007 (gmt 0)

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If payment was taken, the broad legal principle is that a contract exists and the buyer is entitled to the goods or a remedy equivalent to the goods - in this case, potentially, the value of the goods: $200.

Under certain circumstances a contract is void - if, for example the seller took $1.00 for the Mona Lisa. Such a contract could never be fulfilled. Equally, an error might void the contract, but the legal position would be decided by a court according to relevant case law.

8:20 pm on May 25, 2007 (gmt 0)

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There are some laws that do deal with this.

You aren't obligated to sell it to him at that price but if you already took the money for that product...even if it was $1 then you completed a transaction. He came through with the funds and now it is up to you to come through with the product.

If you stopped him from ordering it before the transaction went through you are most likely in the right.

I would suggest setting up a duplicate of your site that isn't accessible to the public... make your changes there first... review them and then launch the changes live after launching them in the test site.

You don't want this to be a re-occuring issue.


Play games with him. Take his card number incorrectly, when he calls to complain about non-delivery tell him the card didn't work and take another one, send him a snail mail letter to say the number is wrong, take the first card again, forget to send him the letter in the post, or send it to his card company by mistake.

This is really bad advise... If you take his card number you are accepting his offer of $1 for this product which will place you into a sales contract with him. Then you will have to come through with the product.

Tell him you are not willing to let him benefit from a mistake that was caught before it was too late. Send him some inexpensive promotional item and tell him how sorry you are for the trouble this has caused him.

If he wants to get pushy with the law be honest and tell him you know of no such law and that he should contact a lawyer.

[edited by: Demaestro at 8:22 pm (utc) on May 25, 2007]

8:25 pm on May 25, 2007 (gmt 0)

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The bigger question is, "what if the mistaken price was $150, and should have been $200". Then it's not so obviously a mistake.

In that case, would the seller be "required by law" to make the sale for $150 in the US? What about the UK?

I know it's a hypothetical question, but probably occurs more often than the $1 price tag example.

No he wouldn't be... maybe this isn't the case in some places but in most free markets you don't have to do anything. It has been said but I will re-say it.... the contract isn't in place until an offer is made AND ACCEPTED. If you refuse the offer there is no contract to sell.

5:28 am on May 28, 2007 (gmt 0)

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I am in the USA.
~

The only thing about the incident that angered me was what I perceived to be false pretense on the customers part. He first claimed that he was calling to warn me about the mistake so that I would not suffer greater loss if others who might also take advantage of this error. The good samaritan who demands to be compensated for his good deed. It just seemed very disingenuous.

If it was reasonable mark down, 50% or less, I'd probably honor it, but this was too much. I would have offered him a %25 discount for the trouble, but when someone starts making demands then I usually loose interest in making offers.

~

Re: playing games & bad credit card numbers.

I wouldn't want to play games with a customer no matter how annoying the customer or the circumstance. Word of bad transactions spread too quickly on the internet, and any appearance of impropriety on my part would effectively nullify my argument in the eyes of other potential customers.

Games just make you look ether shady or incompetent.

~

5:32 am on May 28, 2007 (gmt 0)

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Re:" Was his card already charged for $1.00?"

No. All of our orders are reviewed and manually charged by a person in our office. The order was only ten minutes old when he called me. We hadn't even seen it yet.

11:59 pm on May 28, 2007 (gmt 0)

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I've worked in the retail industry virtually my entire career and I can assure you California law would be on your side, and state laws don't usually vary that much.

In California, the law is intentionally vague to strike a balance between protecting the consumer against "bait-and-switch", and protecting retailers in the case of an honest mistake.

I haven't read it in a few years so this isn't verbatim but the there is a clause that says the retailer is only obligated to honor the price "if a reasonable person would believe it to be true".

He's probably just blowing hot air to see what he can get out of you. We have all had customers like this and it won't be long before he loses interest.

William.

12:19 pm on May 29, 2007 (gmt 0)

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No shopkeeper is obligated to sell anything to anyone simply by having priced goods on display, and the goods aren't being "offered". The offer is made by the buyer who "offers" some money for the goods, and a contract exists only when the offer is accepted by the seller.

If the $1.00 in question hadn't been taken from the would-be buyer, there's no contract and no obligation on the seller.

At least this is how it is in the UK, and from what I've seen is the same in the USA.

12:39 pm on May 29, 2007 (gmt 0)

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$1, $10, $100, does it really matter? For low ticket items, it's not like anyone's going to sue you. I can't see it being an issue unless you're selling something worth $5000 or more. IT's not worth anyone's time.

If it does go to court, it's a matter of Tort law and the judge makes a decision as to what's "fair" based on precedent.

If someone is riding you for listing a $100 item for $1 by mistake, blow them off - you don't need a customer like that anyway. They're just wasting your time. For $100 no one's going to take you to court. Go back to paying attention to valuable customers.

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