2016-04-25
Consumers’ Acceptance of Erroneous Price Offers in On-line Sales Transactions Must be Honored
In 2009, Dell Computer committed a significant error in connection with its on-line pricing. Dell mistakenly offered several of its laptop computers for sale at an erroneous price that was as low as NTD 20,000. This erroneously offered price was only one-third of the product's correct price. On-line consumers swamped the Dell website to accept the erroneously offered price, and in excess of 190,000 sales transactions were concluded on-line. Dell refused to honor these on-line sales transactions, and asserted that website acceptance does not constitute formal acceptance, and that as such, there were no sales contracts successfully concluded. Instead, Dell sent out coupons in an attempt to placate the consumers.
Since the occurrence of the Dell erroneous price offer, Taiwan's Consumer Protection Agency, in order to prevent consumers from accepting pricing that is obviously offered in error, announced a model contract for on-line sales transactions. The model contract contains a clause specifically stipulating that, "with proper cause, merchants can refuse to honor consumers' acceptance of offers within two working days from the date on which the contract was formed."
However, based on Taiwan's Civil Code and with reference to the EU's regulatory amendments on erroneous on-line pricing, the Consumer Protection Agency recently changed its view and has now stated that as long as sellers and buyers complete and confirm a sales transaction, sellers must honor and perform their obligations created by such contracts, regardless of how substantial the erroneously offered price might be.
As such, the Consumer Protection Agency has completed a draft legislative proposal and submitted the same to the Ministry of Economic Affairs, which proposal stipulates that when a consumer completes the steps required to conclude an on-line sales transaction and the seller's website confirms the transaction as accepted, the seller shall be obligated to honor and perform its obligations under the contract; otherwise, subject to the Consumer Protection Act, the seller, after its receipt of a notice from the governmental, may be fined by the Ministry of Economic Affairs in an amount ranging from NTD 30,000 to NTD 500,000. If passed into law, the proposal will not have retroactive effect.