Dabs' mistake with Xbox price shows importance of conditions

According to The Register, Dabs.com advertised an Xbox “Ultimate Bundle” including the console, memory unit, controller and three games for £249 exc. VAT. It should have been priced at £379 exc. VAT. The Register reports that the company has contacted thirteen customers who placed orders during the period before it corrected its mistake. It has invited them to re-submit their orders at the higher price.

With annual sales of around £100 million, Dabs is one of the 20 biggest computer dealers in the UK.

Struan Robertson, site editor of OUT-LAW.COM, commented:

“E-commerce sites are not immune to human error when pricing their goods. But companies like Dabs can easily protect themselves against such errors, although it’s difficult to comment on the Dabs situation without having seen its terms and conditions and the confirmation notice given to those who placed orders.

“In general, for an e-commerce site to avoid having to sell products at an incorrect price, they should structure the order process such that, when the order is placed, the customer is making an offer. They should tell the customer that a contract will be formed if that offer is accepted. The confirmation that is sent automatically to the customer immediately following the order need only confirm that the order is being processed – not that the offer is accepted.”

Argos once priced televisions for £2.99 instead of £299. It refused to fulfil the orders, but its terms and conditions arguably supported this refusal. However, more recently, Kodak offered cameras at an incorrect price and eventually succumbed to customer and media pressure to honour the sales, possibly because its confirmation e-mail referred to a contract having been formed.