Hot Deals & Price Typos: Interesting New Ruling

[ChicagoMaroon]

The California Supreme Court recently decided in Donovan vs. RRL Corp. that an ad with a price is a legal offer (not merely an invitation to make an offer) and the acceptance of which constitutes a binding contract. Performance of the contract can only be avoided in cases where there is a honest mistake or where performance would be unconscionable.

Interesting, the Hot Deals forum has seen its share of pricing errors from buy.com's monitor mistake (which started the forum) to Dell's 1GB of RAM for $15. We'll see what happens in the future, but for those so inclined to sue for a pricing error, the language in the Donovan decision sure does give them a basis to.

 

[Urinal Mint]

It's almost unlawful to practice capitalism these days.

 

[hoihtah]

this makes things more interesting... but does it only apply to cali?

 

[loup garou]

Prepare for more etailer failures at the hands of Ferengi.

 

[ChicagoMaroon]

Yeah, it only applies to CA... or if the vendor making that mistake has contacts with CA.

Before when the vendor could argue there is no contract because there was no offer, it seems now that a contract is assumed and the offending vendor has the burden to show why it should not be enforced.

I bet all the internet vendors will be watching their database tables much more closely now.

 

[DannyLove]

I live in Cali + I'm always at the hot deals forum = W00t!

danny~!

 

[RDMustang1]

<< Performance of the contract can only be avoided in cases where there is a honest mistake >>



Pricing errors can be considered &quot;honest mistakes&quot;, no?

 

[Jittles]

Now the question is, will this set a precedent for all resellers? Or just Cali based?

 

[bozo1]

This deals with bait and switch scams, not honest mistakes. If an ad is incorrectly printed or a price incorrectly advertised by an honest mistake, the price does not have to be honored. Nothing changed here except California firming up the laws regarding dishonest bait and switch scams.

 

[ChicagoMaroon]

There's chapters upon chapters in Contracts books dealing with &quot;mistake&quot; and it's not a straightforward matter as one would think.

For example, if dell.com pulls it pricing from TechData (a distributor) and there's an error in the TechData data, whose mistake is it? Or even better, how do you prove something was a &quot;honest mistake&quot;? What kind of proof/evidence would you need to distinguish a &quot;honest mistake&quot; from a bait and switch? It gets fairly fuzzy.

I think this ruling changes the game for internet pricing errors, it shifts the burden of proof to the vendor.

 

[Demon-Xanth]

I think &quot;honest mistake&quot; would be easily justified in the Dell RAM case. If something is selling for less than 10% of it's value, a mistake can be claimed quite easily.

 

[ChicagoMaroon]

whatever.com can put up a site with a bunch of banners and get tons of hits and publicity by selling Athlon MPs for $20 (about 10% of actual value), then claim it was a &quot;mistake&quot;.

Edit: OK, time to stop. I'm starting to sound like my Contracts professor.

 

[PistachioByAzul]

I can put a site with a bunch of banners and get tons of hits by selling Athlon MPs for $20 (about 10% of actual value), then claim it was a &quot;mistake&quot;.

Yeah well, reputable companies don't do that.

 

[MrCodeDude]

Woohoo, I live in CA. Next time Dell trys to cheap me out, I'm filing a law suit
-- mrcodedude