Amazon Blunder Raises Legal Issues For E-Tailers

by Robin Pilgrim, LawAndTax-News.com, London

21 March 2003

A recent blunder by internet retailer, Amazon has raised questions amongst the UK's legal community and the hackles of disgruntled customers, according to reports.

When the e-commerce giant offered HP iPAQ H1910 Pocket PCs (normal retail price £300) for £7.32 on its UK website on Wednesday, demand for the product was so great that the site had to be taken down for several hours. When it returned, the bargain price had been removed and replaced with the correct one.

In a statement released shortly after the incident, Amazon.co.uk announced that:

'In keeping with our Conditions of Use and our Pricing and Availability Policy, we will be cancelling orders made for the HP iPAQ Pocket PCs at the incorrect price this morning. As the Conditions of Use clearly state, there is no contract between Amazon.co.uk and the customer for an item until Amazon.co.uk accepts the customer order by e-mail confirming that it has dispatched the item. Until that time, Amazon.co.uk is within its rights not to accept any customer order.'

However, UK legal experts have suggested that the wording of the company's order confirmation e-mail - received by many of the would-be customers - is a little vague on this issue, hinting at a contract between the e-tailer and customer before the point of dispatch.

Law firm, Beale and Company, which successfully argued a similar case against Kodak recently suggested that:

'Confusion arises from Amazon's confirmation e-mail. Is this meant to be acknowledgement of the order or confirmation of the contract? We would always advise e-tailers to make the first e-mail an acknowledgement of the order, and state that the contract is not formed until the consumer receives a further confirmation e-mail.'

'Amazon's e-mail provides information on how 'To cancel this contract...'. It could be argued that Amazon are stating that this is an acceptance of the consumer's offer, and it would be surprising if a court were to decide that no contract existed at this point.'

However, the Kodak wrangle differed significantly, in that the company had described an erroneous price on its website as a special offer, leading consumers to believe that the discount could be genuine. In the case of Amazon's iPAQ blunder, the rush to buy more than one of the disputed product makes it clear that consumers were aware that the listed price was a mistake from the outset.

According to Trading Standards guidance on the subject, case law indicates that if the buyer recognises that a price is a mistake but chooses to take advantage of that mistake anyway, he or she has no right to insist that the original price be upheld.

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