Law of contract - offer for sale

[1949threepence]

Anybody know what the precise legal position would be if a dealer offered for sale, online, a coin at a fraction of its true value, as a result of a mistake on his part.

Say for example the true worth is £1250, and he offers it at £125, forgetting the last zero. Somebody comes along and buys the coin on line for the actual offer price of £125. The dealer isn't overseeing the sale and the transaction is completed, with a resultant on line receipt e mailed to the buyer.

The dealer then notices his error and attempts to weasel his way out by saying it was an error on his part and refunds the £125 - no sale.

Can he do this, or does the actual closure of the sale over the internet preclude him from doing so, and he is legally obliged to complete the sale by sending on the coin to the buyer at the much reduced price?       

[Peckris 2]

My guess (not a legal definition!) is that if the sale is concluded, it's tough luck on the seller - the buyer has bought in good faith and cannot be compelled to return the item.

However, if a buyer asks for the coin at the price offered, the seller is within their rights to say the price is a mistake. The buyer cannot compel the seller to sell an item where a clear and obvious mistake has been made.

[Sword]

1 hour ago, 1949threepence said:

Anybody know what the precise legal position would be if a dealer offered for sale, online, a coin at a fraction of its true value, as a result of a mistake on his part.

Say for example the true worth is £1250, and he offers it at £125, forgetting the last zero. Somebody comes along and buys the coin on line for the actual offer price of £125. The dealer isn't overseeing the sale and the transaction is completed, with a resultant on line receipt e mailed to the buyer.

The dealer then notices his error and attempts to weasel his way out by saying it was an error on his part and refunds the £125 - no sale.

Can he do this, or does the actual closure of the sale over the internet preclude him from doing so, and he is legally obliged to complete the sale by sending on the coin to the buyer at the much reduced price?       

I think the key point is whether you have made a binding contract with the seller. If you do, then the seller is legally obliged to honor the contract (but getting him to do so is another matter.)

There is definitely no contract yet if you if you just try to buy an item labelled with an incorrect price. The seller is only inviting offers at this stage.

If it is in a physical shop, then the contract is binding once you have paid for the item. Then the item is yours.

However, if buying online, then depending on the seller's T&C, you’ll have legal rights (and a contract) either:

- once you’ve paid for the item
- once they’ve sent it to you

For example, the following T&C is from a very respectable seller states that that the initial acknowledgement does not constitute a contract and that a contract is binding only when an order confirmation has been sent (after the item has been dispatched).

The following is from citizen advice

"Shopping online
Your legal rights depend on something fairly tricky in the law: whether or not you have a ‘contract’.

If you have a contract, the company can’t usually cancel your order, even if they realise they’ve sold you something at the wrong price. They’ll only be able to cancel it if it was a genuine and honest mistake on their part that you should’ve noticed.

If you don’t have a contract and someone realises they’ve told you the wrong price, they can cancel your order."

If nothing is stated in the seller's T&C, and speaking as someone who is not a lawyer, my impression is that there is probably no binding contract until the item has been dispatched. 

 

 

 

 

 

Edited November 11, 2019 by Sword

[1949threepence]

In the kind of case I'm thinking of, the sale has essentially been concluded online, the buyer's money deducted from his bank account, and an "auto" receipt sent, courtesy of the seller's own software. So when it comes to this:-

Quote

If you have a contract, the company can’t usually cancel your order, even if they realise they’ve sold you something at the wrong price. They’ll only be able to cancel it if it was a genuine and honest mistake on their part that you should’ve noticed.

 No problem with the first bit of the above - it will definitely be a genuine and honest mistake on their part, but with regard to the emboldened text, you could almost certainly argue that the buyer will have noticed, because from their perspective they've spotted a bargain. However, the contract of sale is surely complete by default, as the seller has left it to his own software to oversee the transaction? The fact he offered the coin at the wrong price, and wasn't supervising the sale itself, is down to his own carelessness, and the buyer has bought in good faith. In my opinion, any rate.  

Edited November 11, 2019 by 1949threepence

[blakeyboy]

I agree- it is strange that the CA say that 'You' should have noticed- well of course you have, by trying to buy the item 

at the ridiculously low price!  

 So, if you were asked whether you HAD noticed, it would be a bit tricky to claim that to you, buying something

for £125 when it's clearly a £1250 value happens so often that you don't get an alarm bell ringing upon seeing the ad.....

[Sword]

17 minutes ago, 1949threepence said:

In the kind of case I'm thinking of, the sale has essentially been concluded online, the buyer's money deducted from his bank account, and an "auto" receipt sent, courtesy of the seller's own software. So when it comes to this:-

 No problem with the first bit of the above - it will definitely be a genuine and honest mistake on their part, but with regard to the emboldened text, you could almost certainly argue that the buyer will have noticed, because from their perspective they've spotted a bargain. However, the contract of sale is surely complete by default, as the seller has left it to his own software to oversee the transaction? The fact he offered the coin at the wrong price, and wasn't supervising the sale itself, is down to his own carelessness, and the buyer has bought in good faith. In my opinion, any rate.  

I remember buying a suit from a well known departmental store. The site stated that stock is low and there were two available at that size. I placed the order, paid (and money has been taken out of my credit card) and have got multiple e-mail confirmations. One giving me the date I can pick it up from the store. Then I got an e-mail that the order is delayed and eventually not available and my money will be refunded. Obviously, they are liable if there had been a contract. But I have no doubt that their T&C (which of course I couldn't be bothered to read) would have stated that contract is only binding on delivery. 

[1949threepence]

7 hours ago, Sword said:

I remember buying a suit from a well known departmental store. The site stated that stock is low and there were two available at that size. I placed the order, paid (and money has been taken out of my credit card) and have got multiple e-mail confirmations. One giving me the date I can pick it up from the store. Then I got an e-mail that the order is delayed and eventually not available and my money will be refunded. Obviously, they are liable if there had been a contract. But I have no doubt that their T&C (which of course I couldn't be bothered to read) would have stated that contract is only binding on delivery. 

Oh sure, I appreciate that. Plus there are many get outs. The dealer could just say he'd lost the coin, or had already sold it. Nothing anybody can do about that. The only scenario I was thinking of was literally the one where he admits to still holding the coin (a unique item) but refuses to send it on. Bit of a legal grey area?

As Chris said above, if he had already sent it on, then I think that really would be it, and he couldn't possibly try and get the buyer to return it at that point.   

[JLS]

15 hours ago, 1949threepence said:

Anybody know what the precise legal position would be if a dealer offered for sale, online, a coin at a fraction of its true value, as a result of a mistake on his part.

Say for example the true worth is £1250, and he offers it at £125, forgetting the last zero. Somebody comes along and buys the coin on line for the actual offer price of £125. The dealer isn't overseeing the sale and the transaction is completed, with a resultant on line receipt e mailed to the buyer.

The dealer then notices his error and attempts to weasel his way out by saying it was an error on his part and refunds the £125 - no sale.

Can he do this, or does the actual closure of the sale over the internet preclude him from doing so, and he is legally obliged to complete the sale by sending on the coin to the buyer at the much reduced price?       

Ignoring the delicate aspects of contract law, the problem you're going to have is that you have no damages if you immediately receive a refund. You'd have to sue for specific performance of the contract. But this is entirely up to the discretion of the court, and they almost certainly would find demanding specific performance unreasonable under the circumstances.

There's a lot of precedent for specific performance as a remedy in the case of land sales where one party backs out, but in this situation, where the seller did not intend to offer the item at the price, the buyer would be treated by the court as acting in bad faith, and the "unclean hands" doctrine would prevent them from obtaining specific performance. 

If the seller meant to ludicrously overprice the item, then it would be more complex - but in the case of a coin obviously worth £1250 offered for £125, I think you wouldn't get anywhere at all. Which is how it should be really ! 

Edited November 12, 2019 by JLS

[1949threepence]

OK thanks chaps. Some good legal thinking there. It's an interesting one. 

Of course, in a shop you'd be handed the receipt on completion of the transaction, together with the item. On the Internet it's different, as the receipt is sent to you in advance of the item. 

In the case of a shop they couldn't reasonably come after you demanding return or extra money, as the sale would be closed and the item  already in your possession. 

Edited November 12, 2019 by 1949threepence

[Iannich48]

This is very interesting. Just a few weeks ago, i saw a coin advertised at £425 at an online coin dealer's website.. The coin for sale obviously should have listed at £4250. I thought should i buy it, or not? I did not buy it, thinking that it could cause complications at some point. Anyway, the next time i looked on that site, maybe a week later, the coin was not for sale at all. I still wonder if somebody did get a bargain?

[1949threepence]

3 hours ago, Iannich48 said:

This is very interesting. Just a few weeks ago, i saw a coin advertised at £425 at an online coin dealer's website.. The coin for sale obviously should have listed at £4250. I thought should i buy it, or not? I did not buy it, thinking that it could cause complications at some point. Anyway, the next time i looked on that site, maybe a week later, the coin was not for sale at all. I still wonder if somebody did get a bargain?

Very possibly.

A receipt for payment is surely evidence of sale, and as I said above, in a shop the item and receipt are simultaneous - thus, if a mistake has been made it's then too late for the seller to retract.

Over the internet, that is not the case, and it would appear that the receipt has no legal consequence, as the seller has more time to realise his error, and renege on the sale.  

In a shop, of course, the possibility of carrying through the error to point of sale is more likely, because the original pricer is unlikely to be the individual on the till. 

Edited November 14, 2019 by 1949threepence

[Iannich48]

3 hours ago, 1949threepence said:

Very possibly.

A receipt for payment is surely evidence of sale, and as I said above, in a shop the item and receipt are simultaneous - thus, if a mistake has been made it's then too late for the seller to retract.

Over the internet, that is not the case, and it would appear that the receipt has no legal consequence, as the seller has more time to realise his error, and renege on the sale.  

In a shop, of course, the possibility of carrying through the error to point of sale is more likely, because the original pricer is unlikely to be the individual on the till. 

I just have to add, that it was a mint state 1843 penny. 

[1949threepence]

7 hours ago, Iannich48 said:

I just have to add, that it was a mint state 1843 penny. 

Very nice.