Monday, November 11, 2013

WalMart's Unilateral Mistake

For one day last week, WalMart was giving new meaning to "Always Low Prices." Due to a technological glitch, WalMart's website was advertising a video projector for sale for a price of $8.95 that should have been listed for $588.95. A 24" computer monitor that retails elsewhere for about $150 was likewise listed for $8.95.  A Fischer Price Power Wheels battery operated car for kids that retails for about $260 was listed for $29.97.

Luckily for WalMart, an advertisement is not an offer to sell, but merely an invitation to customers to make offers to buy.  That protects the merchant from having to have an unlimited inventory of every item. The merchant is always free to reject the customers entreaty to deal. But in the internet world, customers placed orders online for the advertised prices and their credit cards were charged for the shockingly low prices.

But, once again, WalMart is saved by the law.  WalMart relied on its "terms of use" for its website which states in part: "We reserve the right to refuse or cancel an order for any reason including limitations on quantities available for purchase, inaccuracies, or errors in product or pricing information, or problems identified by our credit and fraud avoidance department."

Is this disclaimer unconscionable?  Does it violate relevant state consumer protection statutes about advertised prices? Is WalMart cancelling "orders" or consummated sales (cancelling contracts as opposed to rejecting offers?)

Even without their internet disclaimer, WalMart may still have been protected by the rule of unilateral mistake.  If a non-mistaken party knew, or should have known, that the other party was mistaken about a circumstance affecting the agreed upon exchange, then the contract is voidable and may be rescinded by the mistaken party.  According to news reports,  many customers were upset with WalMart.  

There is so much legal ground to be covered to adjust to an internet world.

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