Bait and switch - written vs oral obligation

Question

A company is advertising a sale stating that I will receive a discount site wide for 50% off. A hyperlink to the sale clearly shows the sale applies to all available products, further in each one of those products available durations (ex. 1,3 and annual). Finally, by clicking on a link I can take advantage of that sale as advertised (vs having to call and talk to someone). After the purchase, I have access to the product, I receive a receipt and other information clearly showing the sale is valid and final.

That being said... I call the same company prior to purchasing the product via the advertised sale link. A representative from that company verbally states the sale is really only available annually and not any other time frame (I'm not sure if it matters but he did not ask me to not purchase because of the error).

The call ends, and I go ahead and purchase the product using the sale price (I took screenshots of the advertisement and the company's website showing the sale).

He calls me the next day and said that the purchase was done behind his back and that he told me it was only available annually. Therefore the advertised terms are not valid and his statement is.

Am I wrong or is what he saying will hold water? Can they just change their mind (I can't find any disclaimers) From what I've described is all of this bordering on false advertising?

I'm doing research to find a case as well. If someone has a case similar please let me know.

PS We are in different states.

Answer 1

Do you have a contract?

It depends on the website’s terms but almost certainly not.

It is standard practice in e-commerce terms and conditions that your selecting “buy” and giving the vendor money does not create a contract; you are merely making an offer that the vendor can accept or reject. For example, Amazon’s terms are clear that the contract only comes into existence when they dispatch the goods, until then they are free to cancel your order and return your money.

Here the vendor rejected the offer.

Is this false advertising?

Maybe.

It would depend on the specifics of the ad and whether, overall, a reasonable person would be mislead or deceived. It’s possible you misunderstood but that doesn’t necessarily make it misleading or deceptive. I misunderstand a lot of things; that doesn’t mean they were objectively misleading or deceptive.

Notwithstanding, a business does not have to make good on false advertising. An incorrect advertised price does not force the business to anccept offers of that price. It may force a correction and may require the item to not be sold until the price is corrected and it may expose the business to fines, but it does not give anyone the right to buy at that price.

Answer 2

If you purchase a thing online, there is an implied sales contract to the effect that they will deliver 1 widget in exchange for you giving them $10. When they actually take your money, there is now offer and acceptance, and there is a contract. Typically, they don't actually charge you until the object ships, so you can't sue them for breach of contract if it turns out that they ran out of widgets and they cancel your order. Or, if there is an error in the advertised price, etc. I assume that they didn't charge you, and they just cancelled the online sale.

The concept of "bait and switch" becomes relevant if this is a deceptive advertising practice. At the federal level, this is covered by 16 CFR Part 238, where (illegal) bait advertising is defined as

an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.

There follows a series of elaborations as to what kind of practices are prohibited, the first and most important of which pertains to the initial offer:

(a) No statement or illustration should be used in any advertisement which creates a false impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another.

(b) Even though the true facts are subsequently made known to the buyer, the law is violated if the first contact or interview is secured by deception.

There does not seem to be any deception involved in their advertisement, but the question is muddied by your qualifier saying "further in each one of those products available durations (ex. 1,3 and annual)" – when you buy a widget, the concept of "duration" is not applicable (unless these are widgets with well-defined lifespans). At any rate, it seems that the agent on the phone was clear enough about the conditions of sale, but perhaps the online advertising was defective.

The relevant legal / regulatory question would be whether the online advertising is deceptive, versus "in error". Here is what the FTC has to say about online advertising and deception. Without any further evidence of the circumstances, it is more likely than not that the FTC would not find an error in wording of an advertisement to be a deceptive practice. "Deceptive" is not the same as "incorrect", so you would need to provide evidence of a deliberate effort to mislead.

Answer 3

I think I could see it possibly going either way, but would expect that it would typically go in your favour where there is any dispute of fact, as you have evidence of the “written” contract, although where it would get more interesting is where either you voluntarily concede the fact of the phone conversation, or he is able to produce recordings of it.

Because verbal contracts are indeed binding on their own. And gee you seem to have a verbal understanding - if not a contract - that contradicts a digital-written contract. In the sense that as I’ve just realised the phone conversation wasn’t a complete contract, but rather a pre contractual negotiation that didn’t result in a contract/deal, then I suppose I would expect the actual contract to take precedence.

However, and this may be more so the case in jurisdictions where good faith matters more, I think there is a good argument that you reasonably should have known from your conversation with who was probably the business proprietor that the software system seemed to be malfunctioning contrary to his actual business intentions.

So the contract agreed between you and his online store software acting on his behalf may have apparently been entered into in bad faith on your part. But if faith doesn’t matter then I would expect that his software malfunctioning in entering contacts on his behalf is his still fault and the consequences his problems.

I’m reasoning about what the relevant issues would be. Of course how each of them actually are depends on the operative jurisdiction, which you haven’t specified.

Of course you could also then argue that after your phone conversation the software was later offering the discount deal, so who could blame you for thinking that his business pricing had been officially changed since your telephone conversation?