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Are Misleading Advertisers Held Legally Accountable?

feldman_amy Amy Feldman
Amy E. Feldman is a business commentator and legal business...
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By Amy E. Feldman

PHILADELPHIA (CBS) - If a retailer accidentally advertises the wrong price for an item, is it bound by its mistake? Sometimes no, but sometimes yes.

The grandparents of a groom whose wedding was in Bali were sure they wouldn’t be able to afford the trip, until they stumbled across and ad last month on WebJet.com listing a hotel for 86 cents per night. They were told by WebJet that it was a mistake.

In the US, if the retailer advertises a price and then tries to renege on that price, the retailer may be held to the price if the ad was intended to mislead the public into thinking the price was lower than it is (the old “some exclusions may apply” where everything is excluded but the font is too small to read).

And a retailer may even be held to the price he advertised where it was an honest mistake if that mistake was made in his calculations – where he figured he could make a profit at that price but it turns out he didn’t calculate his own costs well enough. BUT where the mistake is an honest transcription error the retailer probably won’t be held to it.

All turned out happily for the grandparents in Bali; despite the transcription error, the hotel honored the incorrect price even though it likely wouldn’t have been legally obligated to do so, although it did tell them that breakfast is not included.

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