Legal advice on pricing error

[Bytor]

Let's say for example that I have seen something advertised on a reputable website with a buy now price of $11.00 that should really be $11,000.00, would I be legally entitled to purchase at $11.00? Someone has put the decimal point in wrong somewhere and I smell myself a steal!

[Swoop]

What else does the auction say? Does it mention anywhere else that the price is 11k?

[Morcs]

Itll be on a classified, and on trademe. happens all the time.

As its a classified, there is no obligation for the seller to sell at the advertised price, as you are buying at their discression. He has to agree to your offer regardless of the advertised price.

if its an auction however, its very different and legally you could get it for $11, but trademe has precautions for this - it will warn you of a potential typo when creating the listing.

[Jizah]

I think there is legal room for error. So no, you won't get it at that price.

[ManDownUnder]

Try it but don't get your hopes up. There's always the ocassional situation where a vindictive spouse is "getting what she can" as agreed with the ex who just ran off with the secretary.

If $11 is all she can get then you're both happy. Quite legal too I think.

[Big Dave]

Where I'm from an advertised price is considered an offer to sell. The vendor is not however obliged to accept offers to buy at that price - apart from the laws of decency and the court of public opinion.

E & OE.

[wickle]

Looked at something on trademe similar once, before I could bid TRADEME pulled it!

[mashman]

Itll be on a classified, and on trademe. happens all the time.

As its a classified, there is no obligation for the seller to sell at the advertised price, as you are buying at their discression. He has to agree to your offer regardless of the advertised price.

if its an auction however, its very different and legally you could get it for $11, but trademe has precautions for this - it will warn you of a potential typo when creating the listing.

Morcs beat me to it... I would imagine, as this is not an inconsiderable amount of cash, that the seller wouldn't honour their listed pricing... pricing changes... But if it's an auction, rock on and good luck...

[klingon]

Where I'm from an advertised price is considered an offer to sell. The vendor is not however obliged to accept offers to buy at that price - apart from the laws of decency and the court of public opinion.

E & OE.

Apparently an advertised price isn't a formal offer (in the contract sense) it's an invitation to offer (invitation to treat). The BUYER then makes the offer and the SELLER accepts the offer - only then you have an enforceable contract.

If it's a genuine mistake then there is no obligation to carry through with the deal on the seller's part. If, however, it was a deliberate effort to deceive someone, there can be other remedies/penalties.

Yay for studying Commercial Law all those years ago! (I hope it'sall still true... but being KB I'm sure someone will correct me if I got it wrong. In fact they will probably correct me if I got it right... :rolleyes:)

[ynot slow]

I won a radar detector a few years ago,was advertised at $1.00 reserve,auction finished about midnight on a Friday night,won it for $70.00,next minute another auction was started automatically by seller,but instead of $1.00 reserve had $1.00 buy now.I clicked buy now for $1.00 and won it.Got 2 emails saying congrats etc,please contact seller re delivery etc.Come next day and all good,then Monday get email saying sorry the auto loading stuffed up(he did have buy nows for $85.00)and they weren't going to complete sale for $1.00,emailed trade me they said he had to honour but was at sellers descretion blah,blah.In the end I grabbedthe $1.00 sale for $60.00 for friend.Spent a week with seller trying to get it for $1.00 but let it go,as seemed an honest mistake.

[Bytor]

Ok, it's NOT a Trademe auction!

Infact it's not an auction at all, but a online dealer with a buy now facility for goods.

[p.dath]

The legal perspective presented by klingon is good.

However you should also consider the moral aspects. It you realise that there is an obvious gross error - do you really want to try and make that person incurr a loss of that magnitude. Imagine you were in their shoes. :)

[Ixion]

What Ms Klingon said. Palpable error, even if it were deemed more than an invitation to treat, since there was no meeting of minds (you admit you realised it was an error), there is no contract.

[The Stranger]

Let's say for example that I have seen something advertised on a reputable website with a buy now price of $11.00 that should really be $11,000.00, would I be legally entitled to purchase at $11.00? Someone has put the decimal point in wrong somewhere and I smell myself a steal!

Nice try, but I sincerely doubt you will have a leg to stand on.
I suspect it is an invitation to treat and not actually an offer, so your "acceptance" then becomes the offer, which they may decline.
If for some reason that test failed (but I doubt it) it may very well fall under the contractural mistakes act (yes this is a real act) - basically if you know there is an error or you should have known there was an error a court can cancel or otherwise modify modify the terms of the contract, and would likely take a dim view of you persuing it.
If that fails, good luck getting it from the seller.

[ynot slow]

Ok, it's NOT a Trademe auction!

Infact it's not an auction at all, but a online dealer with a buy now facility for goods.

Was using my experience as example of online auctions/sales as buy now are.
Any online shops are similar to normal outlets in they don't have to sell to anyone if they don't want to,usually if an add is incorrect in newspaper the company will add a comment next day saying the mistake had been made.

Having said that give it a try,see if you can buy for price advertised.Nothing to lose.

[YellowDog]

I think that the legal term for it is: Errors and Omissions Excepted OR EOE.

This means that if they make an error, they cannot be legally be bound to it.

They used to have to state EOE, but I think you will find it somewhere in the Ts & Cs.

[davereid]

Im not a lawyer, but I operate a business, and I have paid a lot of attention to contract law. We also do debt collection, so I have to read a lot of contracts.

I am of the opinion that if an offer has been made, and accepted, then the offer is binding, and could be enforced by the courts.

You are not bound by a sellers terms and conditions unless they are stated before you make the transaction - terms and conditions on the back of an invoice are useless. Same for E&OE. It must be part of the original contract or its not valid.

If someone offers an item for $1 buy now, and you buy it, I think you own it. And they may be bound by the sale of goods act as to quality, as it was buy now, not auction.

[CookMySock]

I have seen something advertised on a reputable website with a buy now price of $11.00 that should really be $11,000.00, would I be legally entitled to purchase at $11.00? Someone has put the decimal point in wrong somewhere and I smell myself a steal!No, you aren't. It's clearly an error and they don't have to sell you anything at any price, even if they said to you directly that they would.

Steve

[mossy1200]

Im not a lawyer, but I operate a business, and I have paid a lot of attention to contract law. We also do debt collection, so I have to read a lot of contracts.

I am of the opinion that if an offer has been made, and accepted, then the offer is binding, and could be enforced by the courts.

You are not bound by a sellers terms and conditions unless they are stated before you make the transaction - terms and conditions on the back of an invoice are useless. Same for E&OE. It must be part of the original contract or its not valid.

If someone offers an item for $1 buy now, and you buy it, I think you own it. And they may be bound by the sale of goods act as to quality, as it was buy now, not auction.
Its been tried and failed.Genuine error in figures are not enforcable as long as there was no intention to deceive.Sale figures are only classed as an OFFER to sell and the seller is able to not sell if chooses not to.Exception is an auction under hammer.
If money and goods have exchanged hands then sale is then final.

[Robert Taylor]

Let's say for example that I have seen something advertised on a reputable website with a buy now price of $11.00 that should really be $11,000.00, would I be legally entitled to purchase at $11.00? Someone has put the decimal point in wrong somewhere and I smell myself a steal!

If you tried to get it at that price I think it would be morally unethical on your part. If the law allowed it then the law is an ass.

[ready4whatever]

I'd buy and ask questions later

[Donor]

The Fair Trading Act says a trader is not obliged to sell a mislabelled item at the advertised price if they can claim it is a "reasonable mistake".

[Metalor]

I've seen a few listings for bikes where someone has done this with the pricing in my time of trademe browsing (wasting time).

I usually said them a humourous message to give them a hint.

[Virago]

...should really be $11,000.00, would I be legally entitled to purchase at $11.00?...I smell myself a steal!

If you feel comfortable about stealing almost $11,000 from someone who has made a simple typo, then by all means give it a go.

But if your own conscience isn't strong enough to bite you, then surely Karma is...

[NDORFN]

That's not cool Bytor.

[HenryDorsetCase]

Apparently an advertised price isn't a formal offer (in the contract sense) it's an invitation to offer (invitation to treat). The BUYER then makes the offer and the SELLER accepts the offer - only then you have an enforceable contract.

If it's a genuine mistake then there is no obligation to carry through with the deal on the seller's part. If, however, it was a deliberate effort to deceive someone, there can be other remedies/penalties.

Yay for studying Commercial Law all those years ago! (I hope it'sall still true... but being KB I'm sure someone will correct me if I got it wrong. In fact they will probably correct me if I got it right... :rolleyes:)

ding ding, we have a winner.

the Boots pharmacy case.

[HenryDorsetCase]

The Fair Trading Act says a trader is not obliged to sell a mislabelled item at the advertised price if they can claim it is a "reasonable mistake".

FTA appies to those "in trade": a private seller on tardme isnt covered. Nor are they covered by the CGA.

[Bytor]

Well just for the hell of it I have completed the purchase and have a printed invoice for a grand total of $21.00 which includes $10.00 delivery.

I completed the order and at no stage did the price alter from $11.00. What is more frightening is that the Terms & Conditions page was blank other than a line of text saying 'Please edit the template file terms_conditions.tpl to modify Terms & Conditions text.'

I HAVE NO INTENTION OF COMPLETING THIS PURCHASE unless the dealer has won Lotto and I happen to be in the right place at the right time.

So why have I pursued the purchase? Basically to highlight the 'Buy Now' price to the dealer who probably isn't aware of it. Hopefully the said dealer will then contact his website people to ask WTF is going on. Of course the whole thing could be a deliberate way of boosting their database but that seems unlikely.

Whatever I would love to be a fly on the wall when someone opens up the purchase order email tomorrow morning.

I'm not going to name the dealer or product but it'll be interesting to see what kind of response I get.

Just as a matter of interest, I remember a while back KLM had to honour $15 return airfares ordered on their website that should have been $1500! Ok it wasn't in NZ and no doubt people will have actually purchased those tickets online whilst I have not made a financial transaction (choosing the phone option rather than the instant credit card option), but it shows that businesses need to be vigilant with their websites etc.

[Bytor]

If you feel comfortable about stealing almost $11,000 from someone who has made a simple typo, then by all means give it a go.

But if your own conscience isn't strong enough to bite you, then surely Karma is...

not stealing, just making the dealer aware that someone has f**ked up

[Donor]

FTA appies to those "in trade": a private seller on tardme isnt covered. Nor are they covered by the CGA.

Indeed, the OP has already stated earlier this is not a Tardme sale.

[ready4whatever]

if its a car dealer shaft the prick

[Usarka]

The offer and acceptance answers given work in a retail environment and weren't designed for internet purchases.

If you buy something online you normally get an automatic reply confirming your purchase (and your ccard might get debited). If this happens then you've got your acceptance and it is binding........

Not sure if the law has catered for this in the last couple of years or if there are any test cases. Anyone know for sure?

[The Stranger]

The offer and acceptance answers given work in a retail environment and weren't designed for internet purchases.

If you buy something online you normally get an automatic reply confirming your purchase (and your ccard might get debited). If this happens then you've got your acceptance and it is binding........

Not sure if the law has catered for this in the last couple of years or if there are any test cases. Anyone know for sure?

Ah, see post 14 re the contractual mistakes act.

[TerminalAddict]

so the seller is a retailer .. selling products online.
When I did commercial law there was this thing in the CGA that said something along the lines of
"The below average person must understand the advertisment"

This clearly a mistake .. but can the law still be manipulated for personal gain in this case? (starting a new commericial law paper in 4 weeks .. so I'm curios)
Do the contract mistakes act and contract enforcment act play nice together? (one assumes they must)

[p.dath]

Ah, see post 14 re the contractual mistakes act.

But surely once they have taken your money and issued a receipt the deal is complete.

[The Stranger]

But surely once they have taken your money and issued a receipt the deal is complete.

No. Even if the goods are delivered things don't end there. The easiest example for people to comprehend there is perhaps the various consumer protection laws.

[sugilite]

Years back I was in a mall selling crystals from a stall. This elderly woman came up and started checking the prices of everything, and I mean everything. In the end when she thought I was not looking, she took the price off one item and put it on one side of a pair of Rose Quartz bookends. She held it up and said, I'll take this one for the marked price of $10. I told her that it was not the correct price, where upon she told me that as a ex legal secretary she knew I was obligated to sell her the item for the marked price. I then told her, no problem, but as they come as a set and the other side is $35. She got really pissed off with me and demanded to know my name, "Rumpelstiltskin" says I, then she demanded a business card..."that will cost you $35" says me. So she told me she was off to complain to the Mall manager. "Be my guest" says I as he knows me well. She came back with him and I had no problem telling the mall manager I felt she was a crook, and had probably done this before. As I said that, I noticed she got really twitchy, so I told him, ring around the other malls, I bet they know her. She was now looking mortified. He later told me he did ring around other malls, and BINGO! she was banned from at least two of them.

There was a little sequel to this story later that day. I went to the bathroom at the mall, and they were down a loooong secluded hallway, and who should I see coming out the ladies....you guessed it, so just me at 6'6 tall and her at under 5 ft tall in the hallway...I actually just turned around and walked the other way, but did chuckle at the look of her crapping her self for the 2nd time in just a few minutes :lol:

On a side note, there is no way a shopping mall should have a bathroom setup like that. I mean she could of tried to mug me for the 2nd time that day :buggerd:

[klingon]

So, sugilite, I see you've met my mother then? :rolleyes:

[Ixion]

But surely once they have taken your money and issued a receipt the deal is complete.

Would you still be saying that if you later found they'd overcharged you? Or that you'd bought the wrong product?

Remember a contract binds both ways.

[The Pastor]

if its advertised for $1 you have to sell it for $1.

advertised means in a broucher mail out, or mass email or a price in a shop window or a big sign that would attract you into the store from else where.

If you go into a store then the price tag has no relevance at all to the final sale price. Some big stores like supermarkets or shops in malls will honor the mistaken price tag (being that its cheaper than they want to sell for), but that is company policy not law.

so if you got an email or flyer in the mail, then that has to be (under law) the final sale price, but if you are in a website or store and see something wrong then its up to the store if they want to honor that price or not.

[p.dath]

No. Even if the goods are delivered things don't end there. The easiest example for people to comprehend there is perhaps the various consumer protection laws.

So that leads me to the question of when do you consider a deal complete then - as in full and final settlement?

[p.dath]

Would you still be saying that if you later found they'd overcharged you? Or that you'd bought the wrong product?

Remember a contract binds both ways.

I would expect that if I had paid for the goods, got a receipt, and walked away with the goods only to find I had paid too much when I got home then that was my bad luck for not checking at the time.

This leaves me wondering when a transaction is actually complete.

[The Stranger]

So that leads me to the question of when do you consider a deal complete then - as in full and final settlement?

Not quite sure where you are going with that, but does it matter?
You go in to buy say a motorbike from a dealer. He has 15k on it, you pay your money and out you go. Other similar bikes are priced similarly +or-, you couldn't know, nor be expected to know the price was in error, so deal done. However it throws a rod 13 months later (say 1 month out of warranty) and you feel he should pay. Would you like it to be done and dusted or would you like a come back?

[p.dath]

Not quite sure where you are going with that, but does it matter?
You go in to buy say a motorbike from a dealer. He has 15k on it, you pay your money and out you go. Other similar bikes are priced similarly +or-, you couldn't know, nor be expected to know the price was in error, so deal done. However it throws a rod 13 months later (say 1 month out of warranty) and you feel he should pay. Would you like it to be done and dusted or would you like a come back?

I guess when I say full and final settlement, I meant the transaction is complete. Neither party can return to the table to try and adjust the price.

I wouldn't expect to effectively re-negotiate the purchase price 13 months down the line.
If part of that purchase price includes a 12 month warranty then great. And if you have a failure on month 13 then that sure is hard luck, and you could plead for mercy with the dealer.
But as a said, I wouldn't be expecting to try and change the price I purchased it for at that point in time.

[nodrog]

I guess when I say full and final settlement, I meant the transaction is complete. Neither party can return to the table to try and adjust the price.

I wouldn't expect to effectively re-negotiate the purchase price 13 months down the line.
If part of that purchase price includes a 12 month warranty then great. And if you have a failure on month 13 then that sure is hard luck, and you could plead for mercy with the dealer.
But as a said, I wouldn't be expecting to try and change the price I purchased it for at that point in time.

are you that Ian Orchard guy, that used to be on Target?

[p.dath]

are you that Ian Orchard guy, that used to be on Target?

Haha. Negative.

[Ixion]

The offer and acceptance answers given work in a retail environment and weren't designed for internet purchases.

If you buy something online you normally get an automatic reply confirming your purchase (and your ccard might get debited). If this happens then you've got your acceptance and it is binding........

Not sure if the law has catered for this in the last couple of years or if there are any test cases. Anyone know for sure?

I would suggest (bowing to the professionally qualified ) that the precedent of Boots case referred to infra (upon which I have just refreshed my knowledge!) might readily be extended to cover internet transactions.

Boots Case refers to a case where Messrs Boots the well known pharmacists operated a cash pharmacy. Customers could select goods (like a modern supermarket) and take them to a counter for payment. However a pharmacist could, if he thought proper forbid the transaction upon the grounds of public good (poisons etc).

It was argued by the Pharmaceutical Society that the transaction was completed when the customer selected the goods . The High Court held, confirmed by the Court of Appeal, otherwise. The transaction was not complete until the money was paid over AND the pharmacist agreed.

So, in the case of the Internet, one may argue that the transaction is not complete until the money is paid over AND any conditions determined by the website are satisfied (for instance, the vendor might not be willing to deliver to a foreign country ).

Interestingly this decision was as recent as 1953.

Comment from professional members is invited

And, in passing , they might like also to comment (purely for my benefit, to settle an argument) on the suggestion that the Rule in Shelley's Case might be circumvented by the conveyance of the estate in a long term leasehold, at a pepper corn rental, with eventual reversion to the heirs (at which point of course Shelley's case would obtain)

Normally a contract is established by an offer and acceptance . The point at which the contract ceases to be voidable will depend on the terms of the contract (eg "I will buy your motorbike if you can deliver it by such a date" - the contract may be avoided if the delivery is not duly made, but the determination of that cannot be known until the specified date ).

None of this is relevant, however, if one of the parties is acting under a genuine and palpable error, since in that case no contract is actually formed . If I offer to buy your Honda motorcycle for $5000 and you accept, but , unknown to me you have two Hondas (how gay is that ?) , a CB250 and a CBR1000, and you believe that I am making an offer for the CB250, whilst I was offering to buy the CBR1000, then there is no contract at all. I offered to buy one motorcycle. You agreed to sell a different motorcycle. An offer for Motorcycle A cannot be accepted by agreement to sell motorcycle B. No contract, no deal.

The various provisions of the Contractual Mistakes Act extend the basic rule. A contract founded upon a genuine mistake is no contract.
Usually.

[Robert Taylor]

If you feel comfortable about stealing almost $11,000 from someone who has made a simple typo, then by all means give it a go.

But if your own conscience isn't strong enough to bite you, then surely Karma is...

And thats a very big point. It seems that there are so many out there who are almost happy for traders to go bankrupt just so they can get a ''good deal''

[Max Preload]

Or VOID anyway... :Pokey:

But he's right - covered by the Contractual Mistakes Act 1977 (http://tinyurl.com/6qt59r).


Indeed. It's called the Contractual Mistakes Act (http://www.legislation.govt.nz/act/public/1977/0054/latest/DLM443634.html?search=ts_all%40act%40bill%40regula tion_Mistakes_resel&sr=1).

Much easier just to quote myself. :banana:

[Ixion]

There is a peculiarity about the Boots case cited, which members may find interesting (well *I* think it's interesting , anyway).

Although usually cited as a reference case in Contract law, the action as originally brought was not primarily about contracts.

At the time , a law had been enacted saying that certain substances might "only be sold under the superintendance of a pharmacist".

Now the UK Pharmaceutical Society were very hostile to the 'Boots' company. Back then (I remember it being case here also when I was young), most pharmacys were run directly by the pharmacist. You did not walk in and help yourself and then go to a checkout and pay for the stuff as you do now (that is the Boots model). Instead all the products were hidden away behind the counter or in shop cases , and you asked the pharmacist for each thing you wanted. Pharmacies did not sell cosmetics and such then , only drugs, medicines, simples , trusses, bedpans , bandages and such like. The Boots company had meanwhile 'invented' what we would call a 'modern' pharmacy, where the customer collected what he wanted and took it up to a counter to pay.

The Pharmaceutical Society strongly opposed this model (mainly because it meant fewer pharmacists required). They brought a criminal action against Boots claiming that the latter were in breach of the law requiring that the Certain Substances only be sold "under the superintendance of a pharmacist".

Because, obviously, when the customer picked out his goods, there was no pharmacist nearby. But, said Boots, there *is* a pharmacist to hand at the checkout counter , and he supervises the sale there.

Not good enough said the Society. By then the sale has already taken place , it took place when the customer accepted your offer .They regarded the placing of the goods as setting up what is call a 'unilateral' contract , vide Carbolic Smoke Ball case, and argued that anyone could accept that offer by taking the goods off the shelf at which point there was a valid contract, and thus a sale, with no pharmacist in sight. Boots of course argued the contrary.

So, the whole of the criminal proceedings devolved down into an argument about when the goods were "sold", which in turn of course depended upon when the contract was settled. When the customer selected the offered goods? Or when the pharmacist approved the sale?


The learned judges agreed with Boots, which is why we have modern pharmacies (a state of affairs with which the NZ Ministry of Health still is not happy with BTW - I used to be associated with the pharmaceutical industry, which is where I first encountered the case).

So, a case brought under criminal law ended up being a precedent for contract law. Which I think very interesting.

[Bytor]

This taken from the Consumer Affairs website may answer a few points:

Displayed price incorrect
Traders do not have to sell goods at the displayed price. If the price is a mistake, a trader can refuse a consumer's offer to buy goods at the price on the tag.
eg Mona sees a sweatshirt in her favourite shop. The price tag says $30. When Mona takes the sweatshirt up to the counter to buy it, the shop realises the price tag is a mistake. The correct price is $75. The shop refuses to sell Mona the sweatshirt for $30. The shop can refuse to accept Mona's offer to buy the sweatshirt for $30.
However, a trader who continues to display prices which are much lower than the actual price at which they are willing to sell may be committing an offence under the Fair Trading Act. This is because they are misleading consumers about the true cost of goods.

Trader charges the wrong price
Once you have bought and paid for goods and services, the contract of sale is completed. This means that if the trader has charged you the wrong price, the trader cannot ask you to pay the balance.
If you learn you have been charged more than the ticket price only when you read your docket, you can ask to be paid the difference between the checkout price and the shelf price.
eg, Jo buys a new shirt. The price tag says $49.95 and this is the price she is charged. When Jo gets home the shop rings to say they have made a mistake - the correct price for the shirt was $69.95. The shop cannot ask Jo to pay the extra $20. They agreed to sell Jo the shirt for $49.95 and the sale has been completed. Jo would not have been aware that the price charged was a mistake.
There is one important exception to this rule. A trader may be able to demand more money from you if they can show that:
you must have been aware that there was a mistake about the price and
there was an "unequal exchange of value" - you paid a small amount for highly priced goods.

Over the counter sales law also applies to online sales within NZ.

For all you doubters out there, I did not go ahead with the deal and the dealer has thanked me for bringing it to their attention. the correct price is $11,500.00

[Manxman]

Where I'm from an advertised price is considered an offer to sell. The vendor is not however obliged to accept offers to buy at that price - apart from the laws of decency and the court of public opinion.


S'right. In the UK, it's called 'invitation to treat', and is part of contract law.

That is, the seller is actually inviting you to make an offer. When you say you want to buy at $11, that's you making the offer part of a contract, which the seller can then either accept or reject (most likely reject in this case, when he realises his mistake).

[James Deuce]

And thats a very big point. It seems that there are so many out there who are almost happy for traders to go bankrupt just so they can get a ''good deal''
Indeed. Always remember: People suck.