The Tesco Direct website crashed on Tuesday (13 March) under the weight of bargain hunters trying to take advantage of an IT glitch that led to the new Apple iPad tablet being listed for sale at just £49.99. But despite consumer campaigns, the company is under no legal obligation to honour the 'too good to be true' deal, lawyers have said.
Tesco said the advertised price was due to "an IT error" and has refused to honour any of the orders that went through for the device at the low price, which has led to customer complaints. The error has now been corrected and the black, 64GB iPad with Wi-Fi and 4G, is now listed as costing £659 – although it is also currently out of stock.
Unfortunately for the bargain hunters in this case, the law is on the side of Tesco, thanks to its carefully worded terms and conditions.
Under contract law, a contract between a buyer and seller is only binding when an offer has been made and the seller has accepted the offer. The sales process up until this acceptance is called an 'invitation to treat', which legally is not an offer, but rather an indication of the buyer's willingness to negotiate.
Tesco.com's terms and conditions state clearly that it will have only accepted an order when it has sent an order out: "At all times our acceptance of an order takes place on despatch of the order, at which point the purchase contract will be made and you will be charged for your order."
The company has also further covered itself with a specific disclaimer on its Tesco Direct product terms and conditions page: "If, by mistake, we have underpriced an item, we will not be liable to supply that item to you at the stated price, provided that we notify you before we despatch the item to you.
"In those circumstances, we will notify the correct price to you so you can decide whether or not you wish to order the item at that price. If you decide not to order the item, we will give you a full refund on any amount already paid for that item in accordance with our refund policy."
Acceptance is key
It is a straightforward contractual issue, said Danvers Baillieu, senior associate at law firm Pinsent Masons.
"Until there is an offer and acceptance, there is no contract. The way the online contract is set up, the magic moment [when the seller accepts the order] is delayed as far as possible.
"Tesco has covered itself. Legally, they are off the hook. From a PR point of view, it is a bit uncomfortable," said Baillieu.
Baillieu said that the key is when the contract is formed.
"The classic mistake is when an e-commerce seller says 'we will send you a confirmation email to confirm your order is accepted'.
"If I made the order, paid for it and received an email saying 'your order has been accepted' then I would have a strong argument to say it was a binding contract," he said.
He added: "But obviously if it says 'we have received your order and it will be processed'. It is more an acknowledgement of the order, rather than acceptance."