Can consumers claim fulfillment of contract when sellers undermark goods’ price mistakenly?
On Nov 10, 2020, the plaintiff surnamed Gao made a purchase described as "a case of Maotai" (Maotai is a top Chinese alcohol brand) from an online store of the defendant. In the next five minutes, Gao placed another three orders for one case, 100 cases and 50 cases of the same commodity, with a total price of 106,248 yuan ($15,342.8). The defendant didn't deliver the goods upon the order. After the plaintiff's multiple attempts at communication with the e-commerce platform and the defendant, the defendant still refused to make the delivery. The plaintiff thus sued the defendant at the Beijing Internet Court (BIC), requesting the defendant to fulfill the contract and deliver the 152 cases of Maotai.
The defendant argued that the preview picture of the commodity in the orders involved was a display of a single bottle. With reference to other related information such as the sales information and commodity specifications on the homepage of the store, it could be deducted that the commodity was sold by bottle instead of by case. The selling unit being a case instead of a bottle on the orders involved was a price mismarking.
Besides, upon spotting the mistake, the defendant took timely action to explain to the customer and amended the mistake. Delivery wasn't arranged. So, the contract could not be considered finalized.
After investigation, the court found out that both the commodity snapshot and order details showed the price was per case. But the commodity picture on the order page, as well as weight, packaging and volume information on the commodity introduction page all showed the commodity was sold by bottle.
The conversation record between the plaintiff and the service staff showed the service staff specifically told the plaintiff it was 699 yuan for one bottle, not for a case, that the price was mismarked. If delivery was to be made, it had to be delivered at the price per bottle; or, the plaintiff could cancel the order and the platform would return the payment with some compensation. But the plaintiff refused the proposals.
The court also determined that the defendant canceled all four orders and returned the payment. The real transaction price of the alcohol involved during the plaintiff's order period was 699 yuan per bottle, and its market price was 869 yuan per bottle.
After trial, the court concluded that:
1. The contract between the plaintiff and the defendant was valid.
As stipulated in Article 49 of the E-Commerce Law of China, where the information on commodities or services released by an e-commerce business meets the conditions for an offer, the contract shall be formed if a user chooses the commodities or services and successfully submits an order, unless otherwise stipulated by the parties. In this case, the store offered detailed introduction of the commodity. The consumer had direct access to the commodity information in the process of order submission and payment. The price marked mistakenly did not affect its information display constituting an offer. Therefore, the BIC decided the sales contract between the plaintiff and the defendant was established.
2. The plaintiff should not take advantage of the defendant's price mismarking and maliciously order large amounts to seek improper profits.
Although the contract was established despite the price mismarking, the plaintiff would gain improper profits and the defendant would suffer economic losses if it was to be fulfilled. The service staff on the defendant’s side notified the plaintiff on the purchase day about the correct pricing of the involved commodity, which was 699 yuan per bottle. And given Maotai was a famous brand, the plaintiff should have had a common understanding of the proper price range of the alcohol. It was obvious that there would be a serious imbalance of interest between the two parties if the contract were to be finalized by delivery.
Details of the judgement:
All the claims from the plaintiff were rejected. After the verdict, the plaintiff filed an appeal. The court of second instance upheld the original verdict. The ruling has now taken effect.
Tips from the judge:
Judge Li Wenchao from the Beijing Internet Court. [Photo/ Beijing Internet Court]
With the development of e-commerce, the process of establishing an information network sales contract cannot be separated from the internet and relies on the algorithm of the internet platforms. Once information input errors occur, the establishment of a contract with wrong pricing is inevitable. If consumers are allowed to contract in bad faith, e-commerce business operators are bound to suffer big losses.
The e-commerce business operator could protect their legitimate rights and interests by evoking the contract via litigation or arbitration based on Article 147 of the Civil Code. Or they could claim the consumer's bad faith contracting violates the principle of good faith and the principle of prohibition of power abuse based on Articles 6, 7 and 132 of the Civil Code. In that case, the consumer's request to perform the contract should be restrained, the contract should be revoked and the payment should be returned.