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Have Your Christmas Cake And Eat It Too!

View profile for Alim Shariff
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With the festive period upon us, retailers are luring consumers into making those big purchases by offering bargain deals on goods.  But what happens when the retailer makes a mistake with their pricing and that new 55” 4K OLED television you were after is being advertised at £199.99 when it normally retails at £1999.99?

There is a long list of retailers that have made pricing mistakes and consumers have always been quick to try and take advantage.  Anyone who has seen videos of ‘Black Friday’ sales that go viral online will have witnessed what effect a huge drop in price on popular goods will have upon even the calmest of individuals – everyone loves a bargain!

So, what are your legal rights when the retailer makes a pricing mistake?  Can you insist on the retailer honouring the price for the 55” television at £199.99 or can the retailer refuse to sell it to you?

There are several factors to consider, the first being whether the product is on the shelf or being sold online.  If the product is on the shelf in the store and you take it to the till, but the retailer refuses to sell it at the price advertised because they realise it is a pricing mistake, there is little that you can do other than make a scene and hope that the manager tries to appease you with some form of offer (word of caution, this doesn’t always work and inevitably results in disapproving tuts from fellow consumers). In this instance, a legally binding contract has not been created as the retailer merely invites you to buy the goods on offer on the shelf.  The contract isn’t created until your money is accepted at the till.  So if the reduced price is put through the till, you pay for it and go off on your merry way you are in the clear!  The retailer cannot insist at this point on you returning the item or paying the difference between the actual price and the price you paid.  A legally binding contract has been created; you are free to enjoy your new 55” television whilst feeling smug about the price too.

It is slightly different however when goods are purchased online.  The point at which a legally binding contract is created will depend on the retailer’s terms and conditions.  This could result in a situation where you see the television online at the fantastic price of £199.99, put it in your basket, proceed to checkout, process payment and the money could have also left your bank account.  You may even get an email acknowledging receipt.  A retailer with carefully drafted terms and conditions could in this instance refuse to deliver the television and refund your money because even though you have paid for the television, their terms and conditions provide that an order is only accepted following delivery.  As the contract is only formed at that point, there is no obligation to fulfil the order.  Having said that, depending on the retailer, you may find that the retailer wants to keep its customers happy and still fulfil the order even though there is no obligation on them to do so.  Marks & Spencer found themselves in this situation on a product mistakenly priced £800 less than it should have been.  After an online petition was started by customers who had bought it, M&S decided to honour the orders.

Other issues that may complicate the matter are the wording of any email from the retailer following you placing the order online – is it merely an acknowledgment or confirms a contract and a retailer could also argue that it was clear an error occurred and it was obvious that they had no intention to create a contract for the product at that price.  A fundamental element of contracts is the intention to create legal relations.  In the example of the 55” television, the retailer could argue it would never be on sale for such a price and the consumer would have been aware that the price was a mistake.

The upshot: if you bought goods online following a pricing mistake and the retailer refuses to honour the purchase, check their terms and conditions carefully to see where you stand.  For the retailers, you must check your terms and conditions are carefully drafted as well as any automatic email that is sent out so you at least have the option as to whether you want to honour the purchase or not.

Happy shopping!

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