Other LanguagesWednesday morning, BestBuy.com advertised a 52-inch Samsung HDTV for $9.99. Yes, you read that right – a savings of more than $1,600. Many buyers jumped online and were able to place orders, but the company announced it was a “pricing error” and cancelled sales. One Washington consumer contacted KING 5’s Jesse Jones, who asked me whether merchants are required to honor such deals. Click here to watch the story.
While it’s not OK for businesses to engage in deceptive advertising, those that make honest mistakes aren’t automatically required to eat the loss. If a retailer can show that the shopper knew or should have known that the price was wrong and tried to take advantage of it, a judge will most likely agree the contract should be rescinded under a section of contract law called “unilateral mistake.”
In an effort to protect themselves from pricing errors, online merchants add terms and conditions to their Web sites that give them the option to back out of a deal. By shopping on their site, you’re theoretically agreeing to those terms. Best Buy’s site states the company reserves the right “to revoke any stated offer and to correct any errors, inaccuracies or omissions including after an order has been submitted and whether or not the order has been confirmed and your credit card charged.”
Whether those terms are justification to cancel the contract is of some debate. Lawrence A. Cunningham, a faculty member at George Washington University’s Law School, addressed the Best Buy error on the Concurring Opinions blog. After a lengthy discussion about contract law, he concludes:
… maybe no one cares about these buyers. After all, what’s the harm? Some excitement about a deal followed by disappointment? But those are interests the law of contract remedies does not protect.
On the other hand, it may matter a great deal. There is some speculation on the Internet that such enticing price quotes are intentionally fashioned to draw attention and shoppers to a site. It is difficult to verify such assertions and the Federal Trade Commission, charged with policing unfair trade practices such as that, reportedly opines this one was an honest mistake, not a phony or deceptive gimmick.
Even so, the law of contracts can help police such ruses, at least as well as the FTC can.
Retailers should read the FTC’s Guides Against Bait Advertising.