At what point is a merchant required to complete a sale?

March 5, 2009 6:09 AM

At what point, if any, is an online merchant required to complete the sale?

I know that ads are "invitations to bargain" and whatnot, so that a merchant is not obligated to honor an advertised price.

But as the transaction progresses from me seeing the advertisement to me putting the item in my cart, to me tendering payment, to my order being processed, does the merchant lose their right to back out of a sale?

Specifically, I found a very good deal on a major retailer's "Outlet" website. Specifically, a nice monitor for $50, when $150-200 was the norm. But because it was the outlet site of a company known for cheap products, and because it didn't appear to be a decimal error (e.g., $19.99 when $199.99 was meant), I believed the price was correct and placed my order. If it matters, the product was listed as out of stock but still for sale.

Several days after placing the order, I received an e-mail explaining that there had been a pricing error, and that they were canceling the order and returning my money, as well as giving me a $10 online coupon.

Does the fact that I already paid for the product negate their ability to cancel the sale? It seems that they should lose their right to change their mind after I've already paid.

I'm not an unhinged lunatic planning to sue because they didn't sell me a computer monitor at a really low price. I'm mostly just curious about the law: can they take my money and then decide not to sell it to me?

posted by fogster to law & government (6 comments total)

If they were trying to get you to buy it for $150 after the fact, you could accuse them of doing a bait and switch. But they're not doing that, so I'm not sure what recourse you have.
posted by alms at 6:27 AM on March 5

In the States the contract begins once your card is charged, but check the terms and conditions on the website. Also see this Seattle Times article.
posted by devnull at 6:39 AM on March 5

As a former employee of an online retailer: It happens a LOT. What devnull said. Read the merchant's terms and conditions, the relevant language is in there somewhere.

Also possibly relevant: Your card may have been just authorized, rather than actually charged.
posted by gnomeloaf at 6:58 AM on March 5

devnull is right in his second statement: most online stores have a provision in their terms of use policy which permits them to renege on potential sales when they make an error. Not sure there's any way around this unless they've already shipped you the product and then say they want more money.

Even if this is technically a breach of contract, the fact that 1) there's been an honest mistake, and 2) you are being restored to a better position than you were before the commencement of the contract, no court would grant you specific performance, i.e. require the merchant to make good on the sale.
posted by valkyryn at 7:07 AM on March 5

It won't help you solve your problem, but you'll at least find this classic bit of MeFi history amusing.
posted by mkultra at 7:12 AM on March 5

What follows is not legal advice.

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Short answer: yes, unless you agreed to Terms of Service that state otherwise. This sort of thing is covered by Article 2 of the Uniform Commercial Code, which has been enacted (with minor amendments here and there) in all 50 states. The section you're interested in is 2-511, which reads:

§ 2-511. Tender of Payment by Buyer; Payment by Check.

(1) Unless otherwise agreed tender of payment is a condition to the seller's duty to tender and complete any delivery.

(2) Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it.

(3) Subject to the provisions of this Act on the effect of an instrument on an obligation (Section 3-802), payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.

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I'm going to assume you're a layman since Article 2 is typically covered in the spring semester of the first year of law school. If you are a law student (or lawyer), though, you've just made baby Jesus cry.
posted by saslett at 8:22 PM on March 5