Dell right to refuse PDA orders after pricing error

Out-Law News | 27 Nov 2003 | 12:00 am | 1 min. read

Dell is refusing orders that took advantage of a pricing error on its US web site on Monday. Usually priced $379, its Axim X3i handheld was displayed at just $79. Fortunately for Dell, less fortunately for bargain hunters, it looks like the company has a right to refuse.

Hundreds of customers ordered the Dell PDAs (personal digital assistants) on Monday after the incorrect price appeared – twice – but the orders were swiftly rejected: "Regrettably, we need to cancel your recent order for an Axim handheld PC," read the e-mail to customers.

While customers have inevitably expressed disappointment, Dell appears to be justified in its decision to reject orders, according to Struan Robertson, editor of OUT-LAW.COM.

Dell's US web site terms and conditions state that: "Orders are not binding upon Dell until accepted by Dell."

According to reports, Dell also pointed out in this week's apology that its standard e-mail order acknowledgments do reserve the right to cancel orders resulting from typographical errors.

"Pricing errors can happen," said Robertson. "So if you're an on-line merchant, you need to take steps to minimise their risk – and the solution comes in three parts: make clear to customers in your web site conditions that an order acknowledgement is not an acceptance; ensure these conditions are properly incorporated into a contract with customers; and use an automated e-mail acknowledgement that's consistent with your conditions."

"We've seen merchants shoot themselves in the foot in the past by sending automated acknowledgements that say or imply that a contract has been formed. There's no need to do that. With the right conditions and order process, a merchant can politely and legally refuse orders that are placed for items listed at incorrect prices".