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Wednesday, September 8, 1999 Published at 12:10 GMT 13:10 UK

Business: The Economy

Argos - an invitation to 'treat'

The price tag is an invitation, not a promise

After Argos withdrew its erroneous price-tag on the Internet of £3 for a television set, buyers are furious and talk of compensation - but do they have a point? The BBC's legal affairs correspondent, Joshua Rozenberg, explains.

[ image: Joshua Rozenberg]
Joshua Rozenberg
A shopkeeper has a television for sale. He puts it in the window with a large sign advertising the price. A customer sees it in the shop window and offers to buy it.

The shopkeeper does not have to sell the television if he does not want to. At that stage there is no contract.

The shopkeeper is making what lawyers call an 'invitation to treat', an invitation to the customer to make him an offer.

The BBC's Rory Cellan-Jones: "For a while the decimal point was in the wrong place"
So the customer cannot insist on buying the television at the advertised price. If the shopkeeper has put an unusually low price on it - deliberately or by mistake - he can refuse to do a deal with the customer.

Argos does not have to sell you a television for £3.

However, if the company accepts your order electronically then there may be a valid contract.

A customer who gave Argos his credit card number received what was called a Unique Order Code. That may be proof of a contract, although Argos said all items were "subject to availability".

And it is also possible for the courts to declare a contract void if the seller has made a genuine mistake.

The Consumer Protection Act of 1987 makes it a criminal offence to give consumers a misleading price indication.

Shopkeepers in England and Wales can be fined up to £5000 in the magistrates' courts each time a consumer is misled. It's a defence for the shopkeeper to show he acted diligently and took all reasonable steps to avoid giving the consumer a misleading indication.

But a company could not just claim it was a mistake: Argos would need to show it had reliable systems in place designed to stop this sort of thing happening.

The fact that Argos displayed its prices on the Internet should make no difference. The Consumer Protection Act covers giving misleading price indications 'by any means whatever'.

Local trading standards officers could take action in the part of the country where Argos trades or where consumers happen to live.

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