Contract law involving a department store purchase

[ducasse]

What is the name of your state? CA

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The store advertised a big screen television for $1249.97 "while quantities last". This gave me the impression this was a special sales price for a limited time. It sounded like a great deal so I brought the ad into the store. The salesman looked the item up in the computer system. The price in the computer system said $2399.99. The salesman said he thought that was weird but he agreed to sell me the television for $1249.97. I did not have to insist on the price or haggle. The salesman seemed happy to sell me the TV for $1249.97. My credit card was charged that same day. I was given a receipt for my purchase stating the item had been paid in full that day and was told the television would be delivered on 8/1/03.

Shortly after I purchased the TV the salesperson called me and left a message saying there was a problem. He was not there when I called back but I spoke with a store manager who told me that my order was cancelled because the advertisement had been a pricing error. He stated his store has a disclaimer that states that errors in the advertising price will not be honored. I told the manager than the TV was already sold to me, that I had entered into a contract to purchase the TV when the salesman agreed to sell me the TV at the advertised price and that he had already charged my credit card for the TV and given me a delivery date. The manager stated that there was nothing he would do and that the order was cancelled and the TV would not be delivered.
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I consulted with an attorney who told me that store is in breach of contract and that once they charged my credit card, gave me a receipt for my purchase and a delivery date that they waived their right to claim a pricing error. How could a judge say this was an unreasonable contract when the reprentative of the store saw the price discrepency, did a manual override of the price and agreed to sell me the TV at a lower price. Then they took my money by charging my credit card. This was of their own free will. It did not involve any coersion or threats of legal action on my part. The salesperson was happy to do it and as I left he had a smile on his face and told me what a great deal I got.

The three elements of a contract are here, so clearly it is a contract. It also appears to me a breach of contract has occurred because I did not agree to the cancellation of the contract that we entered into.

Also, the website does have a disclaimer which states they can cancel orders which are a misprice but my purchase was in-store and I had no knowledge of the disclaimer until after the order was cancelled so it wasn't part of my consideration in our contract. I also don't see how someone can post a disclaimer which violates standard contract law. The store says that even if they charge your card and take your money that they can cancel a sale at their discretion for no other reason than them claiming it was a pricing error.

Thanks.

 

[I AM ALWAYS LIABLE]

My response:

I respectfully disagree with your attorney's opinion. There was a unilateral mistake, and the contract was not consummated; i.e., there has not been a "delivery" of consideration - - the t.v. for the money.

Under certain circumstances, the mistake warranting relief may be unilateral. [Ca Civil §§ 1577, 1578(2); Donovan v. RRL Corp., supra, 26 Cal.4th at 278, 109 Cal.Rptr.2d at 821; Simmons v. Briggs (1924) 69 Cal.App. 447, 461, 231 P 604, 610 (unilateral mistake of law)]

A contract may be rescinded even when a party's unilateral mistake of fact was not known to the other party where (i) the unilateral mistake goes to a basic assumption of the contract, (ii) the mistake has a material adverse effect on the mistaken party, (iii) the mistaken party does not bear the risk of the mistake, and (iv) the mistake is such that enforcement of the contract would be unconscionable. [Donovan v. RRL Corp., supra, 26 Cal.4th at 282, 109 Cal.Rptr.2d at 824]

Rescission is also proper for a unilateral mistake if such mistake "is known to the other contracting party and is encouraged or fostered by the party." [Merced County Mut. Fire Ins. Co. v. State of Calif., supra, 233 Cal.App.3d at 772, 284 Cal.Rptr. at 684]

An offer made by mistake cannot be "snapped up" so as to create an enforceable contract. [See Quackenbush v. Omnicor, Inc., supra, 34 Cal.App.4th at 1288, 40 Cal.Rptr.2d at 819]

Nature of Remedy:
Reformation is an equitable remedy that allows a court to alter (rewrite) a written agreement which fails to conform to the parties' oral or other prior agreement as the result of fraud or mistake: "The purpose of reformation is to correct a written instrument in order to effectuate a common intention of both parties which was incorrectly reduced to writing." [Lemoge Electric v. County of San Mateo (1956) 46 Cal.2d 659, 663, 297 P.2d 638, 640; see also American Home Ins. Co. v. Travelers Indem. Co. (1981) 122 Cal.App.3d 951, 963, 175 Cal.Rptr. 826, 832--purpose is "to make a written contract truly express the intention of the parties" (emphasis added)]

Ca Civil § 3399: "When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved . . ."

IAAL

 

[condaggitt]

I guess the moral of this story is:

If its too good to be true, then dont leave the store without it.

 

[ducasse]

Thanks for all the research. Based on what you are stating there it seems like legal arguments could be made on the issue.

What I hear you saying is if one side knows or suspects they are taking advantage of the other it might not be a legal contract.

In that vein I had a question about this citation:

"Ca Civil § 3399: "When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved . . ."

There are great sale prices on merchandise all the time. Many stores have 50% off sales. The TV is question here was 47% off the regular price. How would it be proven that a plantiff knew or suspected this was a mistake other than a plantiff admitting "Yes, I knew it had to be a mistake." And why would someone say that knowing the nature of sales and the large discounts that many stores offer. The wording of this ad in question gave the appearance of a sale when the ad stated "While quantities last."

Also wouldn't it be expected that Sears should reasonably know that the price could be a mistake when they saw such a large price discrepency between the advertised price and the price in their computer system and did a manual override of the price? If they reasonably knew or suspected the price could be an error and still entered into a contract isn't that their responsibility and burden to carry if it was a mistake?


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I have an update!! I just got off the phone with the store manager a few minutes ago who has agreed to sell me the TV at the original price. How this played out is I spoke the the regional manager at Sears yesterday and explained to her exactly what happened. I emphasized that what occurred was a legal contract and that Sears breached the contract. She told me she would be in contact with me today after she researched this and spoke to the store manager. Well she didn't call back today but the store manager called. The same person who just a couple days ago refused to sell, agreed to sell me the TV at the discounted price 30 seconds into our conversation.

I do appreciate your time and effort. I will keep this in mind if something like this were to occur again. I am still curious about the questions I asked above but if you don't want to take the time to respond since this has been resolved I certainly understand. Thanks again.

 

[I AM ALWAYS LIABLE]

My response:

Please understand that the people you spoke to are not attorneys. They are "yes" people. Your outcome had little to do with law, and had more to do with "Customer Relations" and "Good Will" in the community. That's why they capitulated.

Believe me, Sears is not afraid of you, or anyone. Spouting laws and legal theories to them was probably good entertainment.

IAAL

 

[ducasse]

I didn't mean to imply they were afraid. In telling them it was a contract and that they breached the contract I was just repeating what I was told by the attorney I spoke to. Whether what I told them was true or not (I tend to believe it was, maybe because I am biased) I think it gave them the impression I would not go away easily and it probably made a difference in getting them to capitulate.

 

[condaggitt]

I think it gave them the impression I would not go away easily and it probably made a difference in getting them to capitulate.
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I think you got real lucky on this one, only becuase it was Sears a national chain, so what is $1000 to them if it means losing you and your families and your friends, lifetime business.


And #2
I guess the moral of this story is:

If its too good to be true, then dont leave the store without it.


I think any store would have very hard time proving that they should get the $1000+ back from you once you left the store with the merchandise.

Plus as soon as as Store recognizes a mistake, its Usually posted at the FRONT door and near the cash register...something like OOPS the advertised price is Not $1249, but $1999 while quantities last.

None of that was present in your situation.

Enjoy that monster TV.....

 

[ducasse]

Thanks for your input condaggitt.

You are right. Sears has made more than $1000 off me on past purchases and will make more off me and my family and friends in the future. I bought a house a few years ago and bought many new major appliances from Sears. I have spent thousands at Sears. I made it a point to call the regional manager and thank her for intervening and I let her know I had been a pretty good customer for them and would continue to be in the future. Treating customers well pays off. I wish all stores recognized this.