Legal Question in Business Law in California

Mistake in Pricing

A business mistakenly has a price tag on an item for a lower price than it would normally sell for (not an advertized price). Are they obligated under the law to sell that item as priced?


Asked on 9/22/06, 9:34 pm

2 Answers from Attorneys

Edward Hoffman Law Offices of Edward A. Hoffman

Re: Mistake in Pricing

Of course not. If you notice an extra zero on one of your checks do you think you should be required to hand over ten times as much money?

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Answered on 9/22/06, 9:40 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Mistake in Pricing

Mistakes in negotiating and signing contracts can usually be corrected by the party making the mistake if they discover the mistake and notify the other party of the mistake before the other party has suffered any harm in innocent reliance on the mistake.

If the other party has reason to believe a mistake has been made, it is much less likely to be able to enforce the contract incorporating the mistake.

On the other hand, if the party making the mistake tarries in notifying the other, or if the other party has materially altered it position in reliance on the mistake, courts are much less likely to afford relief and may simply enforce the contract.

If you find a mis-tagged item in a retail shop and take it to the check-out, and the clerk immediately recognizes the mistake, I don't believe there is a judge in the country that would require the store to sell at the mistaken price.

On the other hand, when a contractor makes a mistake in his bid, and bids $1 million on a contract where he meant to bid $1.5 million, his right to retract the bid may be cut off if he allows the bid recipient to reject all the other bids in reliance on the $1 million "low bid."

The point is that the law doesn't set traps for folks who make innocent mistakes, but it does punish those whose mistakes lead others into problems not of their own making.

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Answered on 9/22/06, 10:31 pm


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