Camera fiasco exposes Kodak to court action

People who tried to take advantage of an erroneous £100 digital camera offer on Kodak's Web site say they may take the company to court

Kodak may face action in UK small claims courts after people who tried to take advantage of an erroneous £100 digital camera offer on the Kodak Web site said they were not satisfied with the company's explanation.

Kodak's regional general manager Gareth Jones said in a BBC radio interview on Sunday that the company will not honour the offer. Following that interview, one group of customers is understood to have sent a letter by recorded delivery on Monday, threatening court action if the offer is not honoured within 28 days.

The debacle has highlighted the need for firms to be careful about what they post online. It echoes a mistake made by Argos in 1999 when it offered TVs for £3, Kodak said last week that human error had caused it to offer £329 digital cameras for £100. The incident raises questions about how firms should manage and monitor e-trade content.

Although the offer was posted online for a number of days and had resulted in many orders, Kodak subsequently withdrew the offer and cancelled the orders. "Kodak regrets any inconvenience and disappointment caused to customers," it told shoppers. "Kodak does reserve the right to decline to accept any customer's offer to purchase, prior to payment."

A lawyer contacted by IT Week said the legalities of the incident were clouded by a subtle legal distinction between "offers" and "invitations to treat". Simon Halberstam, head of e-commerce law at legal firm Sprecher Grier Halberstam, said, "What Kodak would probably argue, if pressed legally, would be that its Web site constituted an invitation to treat -- not an offer. The customers were effectively making the offer, which Kodak was entitled to reject."

However, Halberstam warned, "Companies should be very careful in how they set up their Web sites so that goods and services are linked to invitations to treat and not offers (in the legal sense)." He pointed out that this would also give legal protection to firms if they received more orders than they could fulfil, meaning they would be able to decline the surplus requests.

IT Week's David Neal contributed to this report.

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