Dell Website Blunder Results in Bargains for All

According to an article in The Age, ‘[a] website blunder by Dell Australia has allowed hundreds of customers to order 250GB hard drives for AUD$8.80, almost [$200] less than the actual price.

According to posts on the Whirlpool and Overclockers Australia online forums, customers successfully ordered the hard drives online from 8.00am on Monday until 10.00am yesterday, when the particular drive was removed from sale.

One customer claimed to have ordered 60 hard drives at the incorrect price.’

“I would have been happy to accept cancellation of the order before payment had gone through because of a genuine mistake, but as payment has been made I consider the contract to be in place and I expect my hard drives,” he said.

“I’m sure Dell would have issues with me if I wanted to cancel an order after I had made payment on a different product.”

It seems uncontroversial that traditional contractual doctrines concerning invitations to treat would apply in an electronic environment. Consequently, where no consideration has yet been provided by the customer, Dell is not contractually bound to perform the contract.

For those lucky punters who did manage to pay in time, the situation is less clear. Presumably, the doctrine of mistake would apply, but here the mistake was unilateral. Prima facie, then, Dell’s mistake does not afford them a basis for recission in law (Taylor v Johnson). Dell might plead non est factum, but the Petelin v Cullin principle only applies where the mistake is one ‘as to the very nature of the contract’. Being a mere mistake as to terms, this seems unlikely. Score one for the consumer.

However, Dell might argue that they are nevertheless entitled to correct the error on the basis of their conditions of sale (posted elsewhere on their website). These conditions expressly disclaim liability for factual errors on the website. Of course, this argument assumes that such terms are actually incorporated into the contract.

Plainly, though, the purchasers must have bought the hard drives with the knowledge that the price was ludicrously incorrect — the wholesale value of the drives is at least AUD$165 (and Dell is, after all, hardly known to sell hardware for less than cost). It might even be unconscionable for the purchaser to seek to enforce any entitlement to an $8.80 sale price (and plainly unreasonable, too). In any event, I suppose this means that vendors like Dell will be even more careful when advertising goods for sale for the payment of which automated payment procedures are accepted.

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