Internet has become a routine part of daily life, and shoppers increasingly hunt for bargains online. At the same time, merchants use sophisticated computer programs to adjust prices automatically, often without human intervention, in an effort to cut costs and offer competitive rates.
Price errors and broken algorithms
When a shopper sees a dream laptop or other item listed at a shockingly low price, they rarely stop to think about the technology behind the tag. They simply place the order. But what happens when that price is genuinely a mistake caused by a software bug? This issue has gained relevance as more businesses rely on artificial intelligence to manage their pricing.
France’s judicial tribunal in Boulogne-sur-Mer recently examined this issue. A consumer had ordered a gaming console listed at 427 euros instead of 800 euros on the Fnac website. The seller later cancelled the order, arguing that the price was the result of a technical error. The consumer, however, demanded compensation, claiming the seller had improperly refused to honor the contract.
Fnac defended itself by saying the contract was void. It cited two legal grounds. First, the error poisoned the consent needed to form the agreement. Second, the price was absurdly low. Under Article 1169 of the Civil Code, a contract concluded for a de minimis price is null. The company also accused the consumer of acting in bad faith, suggesting the buyer knew the console was worth much more and simply wanted to exploit the glitch.
The court rejected Fnac’s arguments. The price was not illusory or absurd, especially since the item was listed during a sale. The court also found no proof that the buyer knowingly passed the order despite realizing the price was wrong.
A few weeks earlier, the Paris Court of Appeal ruled in a dispute involving Tesla. A buyer, who ran a furniture business, ordered three vehicles at a 44 percent discount. The court decided this buyer, a long-time brand user, could not have missed the fact that such a discount did not reflect reality. Therefore, Tesla could not invoke the price error to cancel the sale.
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These two rulings appear contradictory at first glance. However, they may not conflict once the details are examined. In the Fnac case, the consumer’s bad faith was not proven, whereas in the Tesla case, the court found bad faith established.
Consequently, the ruling suggests that a pricing error should only benefit a consumer of good faith who could not reasonably know the site had made a mistake. From a legal standpoint, this approach shifts the burden of computer glitches onto the professional who uses the technology.
Liability and the burden of proof
The Code de la consommation provides that a professional bears full responsibility for executing the contract correctly. The seller cannot escape this duty simply by pointing to a computer error. To succeed in cancelling the sale, the business must prove that the consumer acted in bad faith. It must also show that the price was illusory or that the consumer knew about the technical flaw.
One major point is that a price reduction of thirty, forty, or fifty percent does not automatically make a contract void. The law protects a buyer’s right to evaluate the value of an item. The consumer may have a better understanding of the market than the automated system. The fact that the price is unusually low does not, by itself, prove the buyer intended to exploit a mistake.
The courts have drawn a clear line between a simple miscalculation and a case of fraud. If a buyer receives a direct notice stating that the website has a bug and prices are wrong, they cannot claim ignorance. However, a shopper who notices a price that seems too good to be true and decides to buy anyway is not necessarily acting dishonestly.
