the Irish for rights

Dell’s Mistake

Dell logo/image, from their website.It is the error everyone online dreams about – a full-price item for practically nothing; and it happened, in Chile. For those who remember the case of the mistaken flights last April, Andres Guadamuz tells us about a massive pricing error made by Dell on its Latin American website last June:

… One of Dell’s main features is the possibility of configuring computers by adding, removing or upgrading components. On 27 June 2008, this feature went wrong, and started subtracting money for an upgrade instead of adding it. … Apparently, some people in Chile found the mistake, and this being the Web 2.0 universe, left messages in Facebook and blogs the gaffe, .. This resulted in an astounding 66 … times increase in sales in that day for Chile, and apparently thousands attempted to get the exploit (unofficially, 15 thousand laptops!). Needless to say, Dell did not fulfil the orders, and offered the affected customers a 15% discount in future sells. …

Andres has an interesting legal analysis of error or mistake both at civil law (Chile is a Civil Law country) and at common law, before concluding:

Regardless of the legal issues, one has to look at the morality of the transactions. … Consumer protection laws exist to protect consumers from legitimate abuses, not to protect obviously fraudulent exploitation of an honest mistake.

We will see how this one develops, but I hope Dell wins.

This is not the only time that Dell has made such mistakes online. In the Chilean case, matters have moved on. A few days ago, Andres reported that

… 40 consumers “affected” by the error have sued Dell for infringing Chile’s Consumer Protection Law by “deceitful error inducing mistake in the price”.

If this were litigated in Ireland (or in most other common law countries for that matter), I would not be sanguine about the customers’ chances on general principles of Contract Law. Even if there are contracts between Dell and the customers, they might be vitiated by Dell’s mistake (especially if the customers had notice of the mistake); and even if the mistake is inoperative and (some at least of) the contracts are valid, the terms and conditions of sale which were clicked through and thus agreed to may very well contain clauses to protect Dell’s position. We shall have to wait and see whether things will turn out differently in Chile.

PS I should say that, despite the similarity between my surname and the name of the computer company, there is absolutely no family connection whatsoever between my family and that of Michael Dell (at least none that I have been able to find, unfortunately, grumble grumble …).

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8 Responses to “Dell’s Mistake”

  1. bridget says:

    In common law countries: there is a unilateral contract (Dell is bound until it revokes the offer), and it is valid until acceptance. It is invalid if the acceptee had reason to know of the mistake or reasonably should have known of the mistake. Right? (Let’s hope so, because that’s what I wrote on my bar exam.) Ergo, no sale. 15% discount on future items is a wonderful gesture of goodwill.

  2. Eoin says:

    @ Bridget. There may indeed be a unilateral contract with all potential purchasers about the process of making a contract of sale for a specific purpose governing the process of making the contract of sale, and the purchasers’ knowledge of Dell’s mistake may indeed be a breach of the governing contract, thus preventing the contract of sale from coming into existence. However, I see it slightly differently: the more interesting question is whether the contract of sale is affected by Dell’s unilateral mistake of which the purchasers’ were aware; and in most common law countries, such a contract of sale is either void or voidable.

    @ Ronan. lol/groan :-)

  3. […] of a fairly common problem of mis-stated prices on websites (which I’ve discussed here, here and here), but I’m not sure I agree with this short and simple analysis of why Arnotts did […]

  4. […] of Transportation rules). I have blogged about similar mistakes on the part of Aer Lingus, Dell, Best Buy, Arnotts, and Round Hall, but I never cease to be astonished not only at the number of […]

  5. […] good company: it has happened to Amazon (2003); Argos (1999 and 2005); Avon (2004); Buy.com (1998); Dell (several times: 2001, 2003, 2004, 2005, 2008 – twice); Hoover (1992); Kodak (2002); Thai […]

  6. […] typo for €649. I have blogged about similar mistakes on the part of United Airlines, Aer Lingus, Dell, Best Buy, Arnotts, and Round Hall. This time, it was VikingDirect.ie – and, as the Irish […]

  7. […] I’ve looked at the legal issues in these situations several times on this blog: see here, here, here, here, here, here and here. Those posts illustrate that there are at least four […]

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Me in a hatHi there! Thanks for dropping by. I’m Eoin O’Dell, and this is my blog: Cearta.ie – the Irish for rights.

“Cearta” really is the Irish word for rights, so the title provides a good sense of the scope of this blog.

In general, I write here about private law, free speech, and cyber law; and, in particular, I write about Irish law and education policy.

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