The Argos case: caveat vendor

On-line retailer Argos has landed itself in trouble after it inadvertently advertised television sets at a price of £2.99 instead of the actual price of £299.  Argos was deluged with orders which, according to some reports, were worth over £1m and included an order from one person for 1,700 sets.

Not surprisingly, Argos is refusing to honour the bargain and some disappointed customers are threatening to sue for breach of contract.

The first requirement of a legally binding contract is that the parties must have reached agreement, usually on the basis of an offer on specific terms by one party which is accepted by another.  Advertisements are often classified as an invitation to treat, rather than an offer which is capable f being accepted: a customer offers to buy goods at the advertised price and it is up to the retailer to accept the offer or not.  However, the courts have yet to examine the issue in relation to e-commerce.  In this instance, acceptance of the price by the customers, coupled with Argos’ confirmation of the order, may be held to amount to a valid offer and acceptance.

Argos also says that the price indicated on its site was obviously a mistake and, therefore, there was no true agreement between the parties that the televisions would be sold at that price.  However, the law is unclear as to whether any mistake should be apparent to a reasonable buyer or the whether the buyer must actually realise the mistake for a contract to be void in cases such as this.  In any event, it is not uncommon to find good bargains and promotional offers on the Internet.

Even if contractual liability is avoided, the Consumer Protection Act 1987 makes it an offence to give (by any means whatsoever) misleading price information to consumers.

Whatever the outcome, one thing is certain, the whole problem could have been avoided if Argos’ site had had appropriate terms and conditions.  Accordingly, it is important to ensure that terms and conditions are drafted so that any price indication is clearly construed as an invitation to treat and orders are subject to availability, confirmation of price and specification.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.