Argos in the clear over 49p TV e-commerce error

Legal experts have confirmed that Argos has the right to refuse to honour thousands of orders after it accidentally offered a television and DVD for 49p on its Web site.

The UK retailer apologised after 10,000 customers played orders for the TV and DVD earlier this week, which should have cost £350. Argos is refusing to supply the equipment for such a generous price, and is instead giving the bargain-hunters their money back.

The error has been blamed on a computer glitch, and echoes a similar gaffe six years ago when Argos offered Sony Nicam TVs for £2.99 each, instead of £300. This sparked a massive row, but then, as now, Argos got away with not fulfilling the orders.

The key, according to Struan Robertson, technology lawyer at Pinsent Mason, is that Argos has put detailed terms and conditions on its Web site. This includes the following provision: "While we try and ensure that all prices on our Web site are accurate, errors may occur. If we discover an error in the price of goods you have ordered we will inform you as soon as possible and give you the option of reconfirming your order at the correct price or cancelling it. If we are unable to contact you we will treat the order as cancelled. If you cancel and you have already paid for the goods, you will receive a full refund."

Because online shoppers must tick a box confirming they have read these terms and conditions, they are effectively incorporated in any sale, said Robertson.

This helped Argos to argue that it should not supply the TV at the price advertised as when people tried to buy from the Web site they were merely offering to buy goods, and that the contract was completed only when the order was confirmed.

"Pricing errors will happen from time to time, but companies can protect themselves against potentially huge losses with a good e-commerce process," said Robertson, who added that some e-tailers are much less prepared. "Recently we learned of a large site trying to cancel orders for Sony Vaio laptops priced under £2 each. The site had done everything wrong – its conditions were awful – and customers had strong grounds for challenging the refusal to fulfil their orders."