Oops!...I clicked it again

© li xuejun – 123RF.com

Clicking on the 'I accept' button on a website is light years apart from donning your toga and going down to the Forum to recite formulae to the vinarius (Latin for wine merchant) in order to induce him to part with an amphora of the good stuff, as you would have to have done in the classical Roman period. It is little wonder then that our Roman-Dutch-based law has struggled to keep up with the advances in technology. Legislation has been resorted to breach the gap.

In the case of ordinary, face-to-face commercial transactions with consumers, section 23 of the Consumer Protection Act deals with errors in the displayed price. When goods are advertised for sale via the internet, another set of rules kicks in: the Electronic Communications and Transactions Act.

As is customary with legislation, the legislators kindly left some meat on the bone for struggling lawyers by not actually spelling out when the agreement (shrinkwrap contract in Geek speak) becomes perfecta (Latin for complete and binding). This is a significant omission because if the deal is only concluded when a human becomes involved with checking and dispatching the order, that would mean that the advertised price was merely 'an invitation to treat (do business)' and when the customer clicks on the 'I accept' button, he is actually, by a twist of legal logic, not accepting an offer but making one. The seller is thus free to accept or reject the customer's offer (it feels more natural to call it an order). Naturally, the seller would not want to be bound by a massive error in the price if it was to his detriment.

International and foreign law

According to a decision of our Labour Court, there is a duty on a court to ascertain the international and foreign law applicable to the internet and other electronic communication systems in order to determine whether they are binding on South Africa, what the best practice is and, consequently, how the court should interpret and apply provisions of the ECT Act .

Looking to international law then, there is a widely held view is that by clicking on the 'I accept' button, the transaction becomes binding. In the case of Moore vs Microsoft Corp. 293 A.D.2d 587 (2002) 741 N.Y.S.2d 91, the New York Appellate Court ruled that by clicking the 'I agree' icon after having been given the opportunity to read and reject Microsoft's contract at leisure, the plaintiff [consumer] clearly manifested assent to Microsoft's agreement.

To the contrary, Article 14(2) of UNCITRAL Model Law provides that "[a] proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated by the person making the proposal". This is a fancy way of saying it is an offer to treat unless the offeror says it is a binding offer.

Section 21 of the ECT Act similarly permits the parties to reach agreement on the issue. This is a very important provision and one that seems routinely to be overlooked by the operators of e-commerce sites. The significance is this: If an operator does not specify that the transaction only becomes final when the operator confirms that the customer's offer (order) is accepted by the operator, the operator runs the risk of a court finding that a contract is finalised by the customer clicking on the 'I accept' button.

Found out the hard way

The UK's equivalent to our Woolies, Marks & Spencer found out the hard way what can happen if you don't get it right: it was forced to honour orders for 50-inch 3D plasma televisions after shoppers snapped up the sets for just GBP199 instead of the correct price of GBP1099 (copywriters are evidently universally poor at decimals and proofreading).

Clearly, the smart approach is for operators to adopt the advice offered on www.out-law.com/page-429: "[M]ake it clear that by placing an order the customer is making an offer on the site and that the contract will be formed only if the customer's order is accepted by the seller. It must be clear that taking payment from the customer's credit card does not indicate acceptance ...

"Therefore the terms should explain that, while the customer's card may be debited before the contract is formed, if the customer's order is ultimately rejected, a full refund will be made immediately."

Luckily for an online supplier, all is not necessarily lost should it fail to make use of such a clause and then slip up on the price advertised. In cases not covered by the CPA, it is possible for a supplier to argue that the consumer 'snatched a bargain'. In a case that came before a Singaporean court, a dotcom mistakenly priced a printer at 66 Singapore dollars (SGD) rather than around SGD3854 and at least six people placed multiple orders that were automatically processed by the website. When a human at the dotcom eventually picked up the error, the dotcom told its customers that their orders would not be fulfilled. The customers lost in their challenge of this decision. The court held that if the price of a product is so absurdly low in relation to its known market value, it stands to reason that a reasonable man would harbour a real suspicion that the price may not be correct or that there may be some troubling underlying basis for such a pricing. He would make some basic enquiries before proceeding. The South African Supreme Court of Appeal came to a similar conclusion in Sonap Petroleum (South Africa) (Pty) Ltd vs Pappadogianis (483/90) [1992] ZASCA 56).

So look (and ask) before you click.

The Consumer Goods and Services Ombud is the approved dispute resolution body for all entities whose business activities fall within the supply chain that provides, markets and/or offers to supply goods and services to consumers. Its decisions are available at http://cgso.org.za/dl/compendium%20of%20cases_6_august_2014.pdf. This opinion piece is based on http://www.cgso.org.za/wp-content/uploads/2015/03/Advisory-Note-ECT-Act-v5pdf.pdf.