This one occured (twice actually) in November 2008.
First, I'd like to begin by explaining why I believe a contract has been formed between Dell and the customers. And also why their 'cover all bases' disclaimer is not applicable in this scenario.
To bring everyone up to speed, lets go over Contract 101:
Contracts are essentially a basic agreement between two or more parties. They happen to everyone nearly everyday of their life. They are oral, written or even just merely implied by ones actions.
I'd also like to break the myth that all advertisements are just an 'invitation to treat'. This blanket statement is simply not true. There have been many documented cases in Australia where an advertisement has been held to be an offer for sale. (Although this could not be considered the norm)
And the most important factor here, is a contract can not be breached by either party. Just as the banks would not lie down if a customer decided to stop paying their mortgage, consumers should not give up if they believe the retailer is not honouring their end of the bargain.
To extend on this... Untill the offerree becomes aware of the revocation, he or she can accept the offer and any such acceptance will create a valid and binding contract.
Some examples of the above include:
Outcome: When the written agreeement and Longs receipt were taken together, they were sufficient to satisfy the statute of Frauds requirements.
Millar was found liable.
As Heydon JA put it in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 179: "It is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the [plantiff] and a reasonable person in the position of the defendant think as to whether there was a concluded bargain"
As Finkelstein J noted in Fitzwood v Unique Goal (2001) 188 ALR 566 at 591: "This does not mean that contracting parties must use language such as: “I promise to do X if you pay me Y” followed by a statement such as “I agree”. Whether a particular proposal amounts to an offer and whether a response is regarded as an acceptance of that offer, are questions of fact, the resolution of which must take account of the past communications of between the parties, the precise language used by them when it is said they reach an agreement, and the circumstances in which the parties communicated with one another"
Goodwins (Newtown) PTY LTD v Gurry (1959) SASR 295 at 299, Brazel J said: "I think the words ‘offered for sale by retail’ in an Act designed to regulate retail shopping hours must be constructed in the sense in which those words are understood in ordinary everyday use… The [goods] were ‘preseted’, or put forward, or displayed for sale… This amounts in my opinion, to offering goods for sale by retail."
As many customers have had prior experiences with Dell, their prior actions imply that the contract was accepted. For example, the last time Joe Smith ordered with Dell, the acceptance of his order occured when he went to the checkout and presented his Credit Card to Dell. Dell have taken his Credit Card details and stored them to be charged at a future date.
The process has been exactly the same for this Dodgy Deal, however Dell now claim there was no contract this time.
"*This is an automated email, please do not respond*"As Marty Filipowski (Dell AU and NZ PR guy) said to a recent media enquiry into the matter, "we did not accept these orders or send acknowledgements stating we accepted them", which directly contradicts the email with the "Order Acknowledgment" received by those who purchased this dodgy deal.
A further inspection of the order acknowledgment email reveals how the average consumer would be led to believe the order was no longer merely an offer, but had been accepted:
Considering our only means of communication to date has only been via internet, this comment gives further weight to the average user that the order has been accepted and nothing else is required. Methods of communication play an important part in how a contract is made up.
This just adds confusion to the matter, by again appearing as though the contract has been accepted. By indicating that as soon as I make payment, I will receive a payment authority receipt, it seems a foregone conclusion that the deal is accepted . (Payments and Delivery can both be done after a contract has been completed. Keep reading to see why)
"For your Estimated Delivery Date (or to check on the progress of your order) go to My Order Status... Order can be tracked 48 hours after the payment confirmation."
They are discussing delivery. Consumers can only assume that Dell have accepted the offer and are getting the PC ready to be sent to themHowever, they do have the disclaimer in fine print at the bottom of the email:
Dell will not be responsible for typographical, pricing or other errors and reserves the right not to process orders based on such errors. Dell reserves the right not to process orders for any other reasonable reason as otherwise determined by Dell. But I believe this contradicts the Trade Practices Act (1974) here in Australia. (On the basis a contract has been formed already) and will explain why.
Relevant sections of the local laws here in Australia:
Sale of Goods Act (1923)
- Section 8: Contract of sale how made:
"Subject to the provisions of this Act and of any statute in that behalf, a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties"
The conduct by Dell here, has implied a sale. I have an email ackownledgement of my order, and they are stating delivery in this email. It is no different to their conduct on any of their prior contracts with many consumers. - Section 23: Rules for ascertaining intention.
"Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.
Rule 1. Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.
(a) when the buyer signifies approval or acceptance to the seller, or does any other Act adopting the transaction"
Time of payment or delivery does not signify acceptance of a contract. It is when the buyer signifies acceptance to the seller (Such as when giving the seller their credit card details, or transfering money via EFT). I can not stress enough how important this is. - Section 30: Duties of seller and buyer
"It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale"
And ... - Section 31:Payment and delivery are concurrent conditions
"Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods."
Just further evidence that payment is NOT a requirement for acceptance. - Section 53: Damages for non-delivery
(1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery.
(2) The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the seller’s breach of contract.
The above show that it is quite possible that Dell are opening themselves to damage claims, if customers suffer any loss as a result of their refusal to honour the contract.
- Seciotn 23B: Implied representation that goods or services will be able to be supplied at advertised price
(1) When a person, in trade or commerce, publishes or causes to be published a statement advertising goods or services for supply at a specified price, the statement is taken to include a representation that the person will be able to offer the goods or services for supply at the advertised price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
This also could imply Dell in dodgy advertising practices and the like. - Section 15: Division 2 Dual pricing
(1) A supplier shall not sell goods to which more than one price is appended at a price that is greater than the lower, or lowest, of the prices. Maximum penalty: 50 penalty units. - Section 42: Misleading or deceptive conduct (TPA s 52)
(1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. - Section 44: False representations (TPA s 53)
A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: (g) make a false or misleading representation concerning the price of goods or services - Section 51 Bait advertising (TPA s 56)
(1) A person shall not, in trade or commerce, advertise goods or services for supply at a specified price if there are reasonable grounds, of which the person is aware, or ought reasonably to be aware, for believing that the person will not be able to offer for supply those goods or services at that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Many customers affect by this Dodgy Deal have received calls from Dell forcing themto purchase a system more than double the price as the one they originally purchased. Many are being coerced into deciding on the spot if they want the new system, or to cancel their existing order
Aside from the legal stand point here. Many people will claim that this is just a simple mistake by Dell. That they should not be forced to honour the contract... Unfortunetly this is becoming too frequent of an occurence by Dell, and they must take some responsibility for it.
As discussed on the Dodgy Dell Deals page, they have made continual promises to fix their system. They have been doing this for 24 years now. Enough is enough Dell!
And as previous cases have demonstrated, companies can not hide behind this clause to escape liability for the consequences of their recklessness! (Refer to McRae v. Commonwealth Disposals Commission (1951) 84 CLR 377 to see how a mistakes are no longer a valid excuse for this type of thing!)
Aside from the legal implications of this case, my personal views on the ethics displayed by Dell can again be best viewed on the Dodgy Dell Deals page.
Dell should not and can not be allowed to breach Australian law like this.
10 comments:
Argue as much as you like, but the law as it stands would most likely treat the online offer scenario as just that - an offer.
You quoted the case of Goodwins (Newtown) PTY LTD v Gurry (1959) SASR 295 at 299, where Brazel J said: "I think the words ‘offered for sale by retail’ in an Act designed to regulate retail shopping hours must be constructed in the sense in which those words are understood in ordinary everyday use… The [goods] were ‘preseted’, or put forward, or displayed for sale… This amounts in my opinion, to offering goods for sale by retail."
This situation would be analogous to an item being presented in a retail store and being offered for sale. When you present an item at a retail counter, the retailer is NOT obligated to accept your money. The consumer is in fact the one actually making the offer, and the retailer must accept for there to be a binding contract.
Your arguments seem to be founded on Dell misleading consumers with their automated systems that their order has been accepted. What part of automated do you not understand? The email clearly states that the order has not even been processed, and that there will be payment confirmation once the order is completed, and hence accepted. If Dell has not yet accepted payment (EFT aside), then there is nothing to point to Dell officially accepting the order.
I honestly cannot believe the hypocrisy of people who have the gaul to complain about deals not being honoured when they knowingly try to exploit another person's mistake.
Thanks for the comments Jonathon.
Just some things I should have added in the original post;
- Consider the older style manual swipe point of sale Credit Card. In a similar manner, consumers have left an 'imprint' of their credit card details with Dell.
As the swipe credit card machines take acceptance of the contract at the point the merchant imprints the card, the same could be held to online shopping methods.
- Many people have paid by EFT. The money has left their account and is currently sitting somewhere in a Dell bank account. For these people, it could be assumed the contract has been accepted by reading the 'order acknowledgment' email.
- Dell needs to accept some responsibility. They have on numerous occasions assured consumers they would have processes to prevent this 'mistakes' from occuring. Obviously, this still has not happened. These mistakes are having an affect on more than those that are trying to get the cheap deal. On numerous occasions, courts in Australia have not accepted 'a mistake' as a valid excuse for this very reason.
Cheers
I think you are spreading a highly marginal view of the law of contract. Jonathon is quite right in saying that this neatly falls into settled law and there's nothing to distinguish this. I'd be pretty surprised if you've actually completed anything analogous to Contract 101 and still have these misconceptions.
As far as Dell's response in this regard, it's something extra-legal. It's a matter for their PR team, not legal.us
Jonathan, the law would not treat the offer scenario in any way whatsoever, the law is a set of rules/regulations made by a governing body. The courts governed by magistrates and judges would decide this issue.
You say the author could argue as much as he likes and that the courts (you said law) would most likely decide it was an offer regardless. Given your suggestion, I suggest that if a judge were presented your argument (which has no support) and the authors argument (which is supported by case law) the judge is more likely to take favour to the authors argument.
You ask "what part of automated do you not understand?". Don't insult the author - especially since you show a lack of understanding of the concept of law.
The people purchasing these items were not knowingly exploiting anyone's mistake. They saw an advertised price - there was no indication that the price was somehow a mistake - and they bought it. Note: being good value is not a mistake or an indication of one.
Please, tell us how Dell did not accept the offer of those customers whom it took money from?
There are no two ways about it - if you take the money you have sold the goods.
Only those customers it had not taken any money from does it stand to win a argument with in regards to whether the contract of sale was fulfilled or not.
My apologies to 'has' for not writing a full transparent supported legal argument. It was not my intention as I prefer not to spend copious amounts of time researching arguments to win your vote on an interweb blog post. Instead I was merely trying to point out, as Gregory L stated, that the author has put forth some arguments which I believe are narrowly focused. And I humbly disagree with those arguments, in light of my experience with the law.
Suffice it to say that I do possess a working knowledge of Australia's legal and judiciary systems. My use of the word 'law' in my original comment was intended to be an all encompassing term that not only covered the broad body of statute and regulations as enacted by Parliament which you so astutely point out as being 'the law'. But my use also includes the common law as laid down by the judiciary through precedent decided in case law. Contrary to what I think you are implying, decisions by judges are considered by legal professionals to be 'law'.
In any regard, I did not mean any disrespect to the original author. I give kudos for actually citing relevant case law and statute. But in my humble opinion it (the argument) probably wouldn't get up.
The scenario of swiping the credit card is missing the point - slightly. In my original comment, I was inferring that the taking of the order and credit card details by the website was an automated process. As far as I am aware, no actual debiting took place (except for EFT for which I am not commenting). The swiping of a credit card by a retailer is a positive affirmation by the retailer that he/she is accepting your offer as your transaction is processed on the spot.
This is distinct from the automated Dell website where it appears that Dell does in fact have a process in place whereby an order has to be processed/verified by an actual person - hence possibly explaining why no order has actually gone through. Taking it to the next level, I would say the website is simply an automated process through which Dell collects the customer's information.
Contrast this with some websites which do automatically debit the customer's credit card. In this case I would say the offer was accepted and a valid contract formed, and therefore it would be the company's fault for employing such a practice if they made a mistake with website pricing and an order was confirmed.
OK, so just to recap what seems to be the main theme so far:
+ "The buyers that paid via EFT should be entitled to the deal, as payment has been made."
So far people seem to agree with that
And...
+ The buyers that paid by credit card are NOT entitled to the deal, as Dell have not charged the credit cards.
In a one off case I would probably agree with this. But I believe in this scenario it could be argued successfully that a contract has still been formed because.
- It may fall under an 'implied' contract. Dells previous actions could lead (a previous Dell) consumer to believe a contract has been entered into in this example.
- I still believe an 'imprint' scenario is valid. Even in modern day transactions, when you pay at the checkout, the retailer may store your credit card details to later on charge in batches. In this case, the contract is still entered into when the credit cards details are stored by the retailer.
I will agree with jonathon as far as if this were to ever go to court, it would stand little chance against Dells legal weight. BUT, given an even playing field I still believe this case could be argued with a chance of winning.
However, it is only slightly on the winning side of the see-saw to begin with anyway...
Any chance of adding a paragraph to that wall of text detailing the process you used.
From ozbargains.com.au where I assume you posted instructions. It would appear that the following happened.
You went to a certain page where a computer is listed for $799 by Dell.
You then enter an e-code of unknown origin which gives that computer certain accessories for free.
You then go to the customization page and remove those accessories. Doing so removes the pre e-code price of those accessories from the current total price. As opposed to recalculating the total cost.
I believe it would be relevant where you got the code from, how it was advertised and what it's purpose was. I assume if it was advertised it was something like get such and such free accessories for your computer.
If so wouldn't it be similar in some respects to obtaining goods at a discount from a retailer and then returning them and asking for the normal price on a refund?
By removing the accessories wouldn't that mean that even if there was an offer by Dell, you have rejected it by removing accessories? After all the original coupon would have been the offer if there ever was one.
I'm a slashdot.com reader and came to read the post, as it called my attention. I'm not a law expert, but I consider myself a reasonable person and I'm not taking sides here, but while reading this post, something came to my mind.
The author of the post quotes
Section 31 from the Sales of Goods Act and uses it as it suits him, but this is misleading, once he comments about it taking just one side of the full meaning of the Section.
I'll explain.
I agree with the author when he says, and I quote: "Just further evidence that payment is NOT a requirement for acceptance."
Indeed, it is not. But the section itself says and I quote, with my comments on it: "Unless otherwise agreed (the disclaimer from Dell's e-mail message), delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods."
I would like to stress a bit more that, I'm not a law expert, I'm not taking sides either. I just wanted to share my interpretation from all info I collected from the post. Maybe Dell is really dodgy, but you know the saying... blame the game... Maybe it is time to change and improve the game rules a bit.
mactimes.
As an additional note, the presence of an EFT is not a definitive (or even, in my opinion, relevant) addition to the existence of an agreement between Dell and a purchaser.
If the basis of the purported agreement is not there (ie, offer then acceptance) then there can be no consideration. (Just as there can be no valid acceptance if there is no offer.) However, consideration does not only ensure contracts are made for value, but they can also be indicia for acceptance (eg, to indicate a party's state of mind as to offer/acceptance).
If you run up to a man on the street, shout "I will buy your car for $5," and then throw a five dollar note at him, you're not entitled to a car. Likewise, if you place an order online (where the T&C state that you're the agreement will arise at a future date at the seller's election) and then throw money at their bank account - no action has been taken by the seller other than to record your order, and certainly no indication of acceptance can be derived from your EFT.
Like Johnathon, I'm capably versed in Australian law of contract, Sale of Goods Acts, and also electronic transactions law. It is my opinion that you are simply wrong when you say that Dell are breaching any laws and you're using bad characterisations and misunderstandings of narrow and/or irrelevant material in atempting to prove this.
(I am also one of the many people who ordered from Dell. I don't really expect it to be accepted.)
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