Incorrect Price?

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Is a US company obligated to honor the price of a CD-ROM on their website?

Canadian Electrical Code software is advertised on their website for $135, but when I phoned to confirm they said it was a mistake and it should be $300.

I told them that they should honor their advertised price, and that should they do so, I would consider them a reliable and honest company to deal with, but they said no we made a mistake.

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Probably not. Certainly not in California. A guy saw an ad for a used Jaguar at $25,500, this sum being around $10,000 less than other dealers were charging for that year and model. The dealers refused to sell at that price claiming it was a "mistake", so the guy sued, filing action in municipal court for breach of contract, fraud, and negligence. He lost, appealed to the Appellate dept of the Superior Court, where the decision was reversed in his favour, but the dealers took it higher still to the Court Of Appeal where they won. It was held that even though the offer to sell in the advertisement, and the customer's tender of the sum mentioned constituted a contract, "a contract properly may be rescinded on the ground of unilateral mistake of fact as set forth in section 153, subdivision (a), of the Restatement Second of Contracts".

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In Germany, it's nearly the same as what contrex wrote above - however, the mistake must be "obvious".
(In this case, 12.99 EURO instead of the advertised 1.299 EURO.)
(OLG Hamm, Az.: 13 U 165/03).

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Nifty!

The question as to what the rationale was for the Appellate Court reversal comes to mind, and if I might get a favorable response by quoting that case to the seller.

I also wonder what the relevance is of me being Canadian, and the fact that this US retailer is selling (what is in some sense) a government Canadian product.

There is no obvious mistake in this case, as the pricing does not use the same numbers.

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Chumly wrote:

The question as to what the rationale was for the Appellate Court reversal comes to mind, and if I might get a favorable response by quoting that case to the seller.

Dunno. The California Vehicle Code has specific sections concerning sale of automobiles, which seem to have formed the basis of their decision, later reversed...

Quote:

Plaintiff appealed from the judgment to the appellate department of the superior court (Cal. Rules of Court, rule 121), limiting his contentions to the breach of contract claim. The appellate department reversed the judgment for defendant and directed the municipal court to calculate plaintiff's damages. Relying upon the public policies underlying Vehicle Code section 11713.1, subdivision (e), the appellate department concluded that the advertisement constituted an offer capable of acceptance by tender of the advertised price. Section 11713.1, subdivision (e), provides that it is a violation of the Vehicle Code for a dealer to "fail to sell a vehicle to any person at the advertised total price . . . while the vehicle remains unsold, unless the advertisement states the advertised total price is good only for a specified time and the time has elapsed." The appellate department further concluded that defendant bore the risk of the mistaken transmission of its offer, because plaintiff was unaware of the mistake.

Read the whole story here, in a Digg thread about a mistaken price by Office Max where they cancelled all orders placed New Years Eve 2006 for the Verbatim 4GB USB Drive

http://digg.com/tech_news/Office_Max_fails_to_Honor_Price_Mistake

I would think that what constitutes an "obvious" mistake would be open to interpretation by a court. What is obvious to you may not be obvious to me and vice versa. A used car price which is two thirds the normal price for that year and model would certainly make many purchasers curious and might be deemed sufficiently "obviously" mistaken that an aggrieved buyer to lose their claim.

As for being Canadian, I guess you should consult a lawyer to see if you can sue from there, but if the fees would be more than the saving on price, it would be a waste of time.

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Assuredly a waste of time from a total legal cost perspective, but from a quick and nasty "reality check" to the seller it might have legs.

It's that aspect, and individual's successes that might be most interesting to hear about.

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I took a consumer law class in college, and granted some laws can vary from state to state, but when we discussed advertising prices, it was explained that this was an offer. In other words, the price advertised is not a guaranteed price, but an offer to enter into a contract so even in a sales flyer or other modes of advertising, if the price is incorrectly stated, the business is not legally obligated to sell for the amount stated in these advertisements.

On the other hand, unless the price is incredibly unreasonable, $1 for a TV for instance, I would imagine many businesses would sell for the incorrect price if pushed more to protect its reputation and to keep a customer happy.

There is some law however protecting false advertisements. For example, advertising that you have certain cars for sale, and you never even had the cars to begin with or they were sold a year ago. I actually experienced this personally - it was an ad showing certain used cars - basically as a draw to get in. When you got there all these cars had just been sold. Funny thing I saw the exact same advertisement a month later. In this case, it would be false advertisement. Another thing is that stores need to let customers know if there is a limited amount of merchandise when offering a particular sale. So if you arrive and there is only one TV at $1 price then this should also be stated.

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A web page is no different from a catalogue really.

Try pulling out a 2 year old catalogue and demanding that you get the price listed there.

The price may have been accurate when first published but there is no guarantee that the price will be the same the day after publication nor do you have any way of knowing when the page was updated.

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It's not an out of date pricing issue in this case.

I'm thinking Linkat is on the most pragmatic track in terms of appealing to the reputation of the retailer.

That's why I said earlier:

Chumly wrote:

It's that aspect, and individual's successes that might be most interesting to hear about.

So although this has been moved to the legal forum by the moderators, perhaps it's more a consumer negotiation issue than a legal one at least pragmatically speaking.

That's why I said in my first post:

Chumly wrote:

I told them that they should honor their advertised price, and that should they do so, I would consider them a reliable and honest company to deal with, but they said no we made a mistake.

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