A Mexican shopper, Rogelio Villarreal, recently got Cartier to honour a pricing mistake on their website. This saw him buy earrings for MX$237 (£11 / US$14) instead of MX$237,000 (£11,000 / US$14,000). In fact, he ordered two pairs. Well, why wouldn’t you?!

Once they spotted the mistake, Cartier tried to reject the purchase. They offered him a full refund, a bottle of champagne and a passport holder. Mr Villarreal held firm and, after Mexico’s consumer protection agency intervened, Cartier honoured the deal four months later.

What would happen in the UK?

Mistakes in pricing happen. Not just this one in Mexico. An online sports betting company tried to avoid a massive payout after an “obvious mistake“. Often, the retailer will spot the mistake before it’s too late, particularly if you buy in person. But with websites, that might not always be the case. A car dealership’s chatbot was tricked into offering a Chevy Tahoe for $1 instead of $76,000. Despite the chatbot saying it was legally binding and there were no “takesies backsies” the dealership didn’t fulfil the order.

The question is what would be the outcome if that happened in the UK? The news reports aren’t clear on what basis the claim was successful in Mexico. In particular, it’s not clear if there are strong consumer protection laws in Mexico and I’m not an expert in Mexican law. While UK consumer protection law is strong, retailers have some protections.

Doctrine of mistake

English law has a doctrine of mistake. The legal effect of a party’s mistake can be complex, with various outcomes. In extreme cases, a mistake might prevent a contract from being formed. Or any contract entered into might be void for mistake at common law. This could lead to a prolonged legal claim to get a court ruling in your favour with no guarantee over the outcome. If the mistake is significant, it may still be worth going to court.

Terms of sale

Most online terms of sale – the ones I prepare anyway! – will usually have some protections.

First, the contract isn’t binding until the retailer confirms. The retailer may send an initial email straight after the order to acknowledge the order but will say they haven’t accepted it yet. They will then send another email confirming the sale, probably after they check the order or just before dispatch.

Second, there is usually wording allowing them to reject the order where there has been a pricing error that is obvious and unmistakable. Selling earrings for half price could be part of a sale – although even then it will often say “SALE” on the listing. Selling for 1/1000th of the price is likely to be a mistake. The retailer might honour the pricing for reputational or goodwill reasons. But they would likely be entitled to reject the order in the UK. Thus, the Mexican shopper might face a different outcome if this happened here.

Dynamic pricing & AI

In this age of dynamic pricing, it might be harder for a retailer to argue that the lower price was a mistake. Having said that, the algorithm adjusting the pricing would likely have parameters set by the sales team. It might allow a reduction (and increase) of up to, say, 50% but not a reduction to 1/1000th of the original price.

Clear terms

Don’t forget though – your terms must form part of the contract with the customer. You should ensure your terms are easily accessible, clearly signposted, and easy enough for the layperson to understand. You don’t have to make the customer scroll through your terms but make sure the customer has the chance to review them and ideally click on an “Accept” button. If you’re not sure what your terms say, you should check them. Nobody wants to go to court over a mistake.

If you need advice, contact me at +44 20 3824 9748 or fjennings@hcrlaw.com.