Amazon mis-priced iPaqs: No sale

Update: The e-commerce giant's UK branch has said it will not send sub-£10 Pocket PCs to its customers after an earlier pricing mistake
Written by Matthew Broersma, Contributor

Amazon.co.uk has said it does not intend to fulfil the orders of customers who took advantage of a pricing mistake to buy iPaq handheld computers for less than £10 on Wednesday.

The company said that its terms of use strictly state that no contract for sale has been formed until customers receive an email stating that their order has shipped, meaning it has no obligation to hand out iPaqs at rock-bottom prices.

"We will be cancelling orders made for the HP iPaq Pocket PCs at the incorrect price this morning," the company said in a statement. The company plans to give buyers the choice of either cancelling their orders or buying the iPaqs at the correct price.

"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 an 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 company stated.

Amazon's UK e-commerce site was taken temporarily offline on Wednesday afternoon, shortly after buyers flocked to the site to buy an iPaq Pocket PC that had been mis-priced at £7.32.

The iPaq H1910 Pocket PC, which retails for about £287 inc VAT, appeared on Amazon.co.uk by Wednesday morning, and remained on the site through the morning, long enough for the word to spread through online forums.

By shortly after 11 a.m. GMT, the iPaq was listed as the site's No. 1 seller. Customers were also able to order an iPaq H5450 -- normally priced at more than £500 -- for £26.27.

Amazon appears to have the legal right to cancel the incorrect orders, judging by the way past incidents have proceeded. At the end of 2001, when Kodak mistakenly offered a £329 digital camera for £100, legal experts argued that Kodak's automatic confirmation email formed a contract with the buyer, mainly because of the way it was worded.

"The legal consensus was that Kodak had formed a contract with the customers at the point when the confirmed acceptance of the customer's order, unless the company said something to the contrary," said Struan Robertson, a solicitor with law firm Mason's, at the time.

Amazon's terms of use, on the other hand, specifically state that the confirmation email does not form a contract: "No contract will subsist between you and Amazon.co.uk for the sale by it to you of any product unless and until Amazon.co.uk accepts your order by email confirming that it has dispatched your product."

Online pricing mistakes are increasingly common on retail Web sites. Previous incidents include Compaq Australia selling a laptop computer for one penny, Kodak's digital camera offer and Dell's offer of a set of high-end $229 speakers for $24.95. Dell and Kodak honoured the sales, but Compaq merely refunded buyers their penny.

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