Jennifer Whitehead,
March 26, 2003
How long?
2-3 minutes

Lawyers challenge Amazon over price blunder orders

LONDON - A group of lawyers has challenged Amazon.co.uk's decision not to fulfil orders for hand-held personal computers that were inadvertently advertised on its site last week at significantly lower prices than usual.

The blunder saw the HP iPaq H1910 Pocket PC offered at 拢7.32, instead of the usual 拢280, and the HP iPaq H5450 model for 拢23.04, instead of 拢515. Amazon was forced to shut its UK site for more than an hour on the day it happened, March 19, while it rectified the mistake.

The letter has been written by lawyers, who do not wish to be named at this point in time, accusing Amazon of misleading customers with confusing terms and conditions, and says that it must therefore honour "contracts" for the lower prices.

A spokesperson for the lawyers said: "I am appalled by the decision Amazon has taken not to honour these contracts. Had Amazon offered all those who sought to purchase the reduced-price handheld PCs one such product, without admitting any obligation to do so, it would have gained a great deal of publicity and goodwill and avoided any legal claims under its inadequately worded terms and conditions."

The lawyers have said that Des McFarlane, a customer service executive at Amazon.co.uk, has replied to their letter by email, saying: "Whilst we note your comments and personal observations, our stance on this issue is very clear and legally correct."

At the time of the error, which led to users ordering the products by the dozen after the news of the knockdown prices spread across the net, Amazon said that it would cancel the orders made at the incorrect price but that it would give customers the opportunity to place new orders at the correct price.

In a statement at the time, Amazon said: "As the conditions of use clearly state, there is no contract between Amazon.co.uk and the customer for an item until Amazon.co.uk accepts the customer order by email confirming that it has dispatched the item. Until that time, Amazon.co.uk is within its rights to not accept any customer order."

The lawyers' letter makes the following points:

  • At no time during the ordering process is a consumer's attention specifically drawn to the terms and conditions. This is required under both the E-Commerce Regulations and Unfair Terms in Consumer Contracts Regulations.

  • There is no tick box prompting consumers to accept the terms and conditions. Good practice in online distance selling is to prompt the consumer to accept the terms and conditions. Sites like British Airways and easyJet offer good examples of this practice.

  • Because Amazon has not drawn the consumer's attention to its Conditions of Website Use and Pricing and Availability Policy, the consumer has not agreed to them and thus they are not properly incorporated into the contract.

  • The E-Commerce Regulations state any business selling online must provide information on the technical steps required to complete a contract online in a "clear, comprehensible and unambiguous manner". The Unfair Terms in Consumer Contracts Regulations also state that terms and conditions must be expressed in plain, intelligible language. Amazon has failed to comply with either of these obligations.

  • The confusing wording of Amazon's terms and conditions leads consumers to believe that the order of acknowledgement is, in fact, an acceptance of the order, thus concluding a contract between Amazon and the consumer. The language used in the confirmatory email (ie "To cancel this contract, please...") reinforces the legal analysis that a contract exists. Moreover, the confirmatory email contains no reference to the terms of use.

  • In a recent case involving Netscape Communications, the US Appeal Court decided that terms and conditions were not binding on the user, even though there was opportunity to read them, because the user's attention was not clearly drawn to them.

    The laywers' spokesperson said that Amazon's actions would alienate existing customers and brought into question the company's business acumen.

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