#Janesblog this week comes from Michael Sproates, a solicitor in our dispute resolution and debt recovery team.
For those who prefer to book a last minute family holiday, trawling through flight comparison sites will be something of a pastime. After spending hours on end meddling with the dates, the departure airport and the destination, there’s nothing better than finally finding a cheap flight to your chosen paradise. So… once it’s booked and paid for, and you’ve sorted your accommodation, surely you can relax and focus your attention on packing… right?
Unfortunately, that wasn’t quite the case for hundreds of savvy travellers who recently snapped up cheap flights to Tel Aviv and Dubai with British Airways. Following receiving the bookings, BA decided to cancel the majority of them, leaving a trail of disgruntled customers in their wake. According to BA, the price advertised was significantly cheaper than it should have been and was therefore considered a ‘price glitch’.
From the consumer’s point of view, this does seem a little unfair. If the business decided to offer the product at a specific price and the offer was then accepted, many consumers would be reasonably entitled to form the view that a contract was created at that point and that any attempt to terminate said contract would place the seller in breach. However, that isn’t always necessarily the case.
For instance, if you walk into a high street shop and pick up a priced product, the price on the tag is not deemed to be an offer by the shop, it is instead classed as an ‘invitation to treat’. An invitation to treat is basically an invitation to customers to make an offer to the retailer to buy the product at a specific price. Therefore, regardless of the price advertised on the tag, the retailer always has the option to refuse to accept the customer’s offer at the till and thus no contract is formed.
However, the flights booked with BA were already booked and paid for online and in these instances the situation gets a little bit more complicated. When booking anything online, consumers’ available rights will largely depend on whether a contract has actually been formed and if so, at exactly what point the contract was formed. The point at which a contract is formed is likely to be either upon payment or upon delivery.
In order to establish exactly when the contract is formed, it is advisable to scrutinise the retailer’s Terms and Conditions and/or the wording of any confirmation emails. Just because you have paid for the goods and received confirmation email, it does not automatically follow that a contract has been formed at that point. Confirmation emails are usually only an acknowledgement of receipt and do not amount to an acceptance of the offer. It is therefore important to check the Ts and Cs to establish the position. In circumstances where the contract has not yet been formed, the retailer is entirely free to cancel the order.
Even in circumstances where a contract has been formed, it may still be possible for the retailer to cancel the contract. However, a retailer can only do so in circumstances where it can be proven that the heavily discounted price was an obvious mistake. For instance, if you discover a new IPhone X on sale for £10.00 instead of around £1,000.00, then this is likely to be either a scam, in which case avoid like the plague, or a mistake on behalf of the retailer thus rendering the contract voidable.
Despite the above, there will always be the option to request that the retailer honours the price or, alternatively, to argue that the low price was not an obvious mistake, much like the British Airways flight prices which still costed around £195.00.
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