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When is an order a contract

YIManYIMan Posts: 576
edited November 2016 in Commuting chat
So....a friend of mine placed an order for a cycling item from an online supplier. The item was showing in stock on the supplier's website and an order number was received after online order placement.

Shortly afterwards the supplier confirmed that the item wasn't yet in stock and would be 3 weeks away. The buyer agreed to wait for the item. No payment has been taken.

Subsequently the supplier has contacted the buyer to say that their supplier has let them down and they are unable to supply the item at the original price. They can supply exactly the same item at a 50% higher price.....

So...when does an order become a binding contract? I would have thought that it is when an order number is provided - thereby notifying acceptance of the buyer's offer to buy at the price advertised.

Note that the supplier is not saying they cannot supply the item. They are simply offering exactly the same item at a higher price. I can't see how they can claim it was a pricing error as this is a month later than order placement after initial contact being about stock deficiencies rather than mispricing.

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  • I think if no money has changed hands your friend is out of luck.

    There is one bike shop I know of locally who pull their stock numbers fro their suppliers. This is massively frustrating as what appears to be in stock is actually at someone else's warehouse and I was caught out once trying to get hold of something I needed. I still shop there, but it's not my first port of call.
  • fat daddyfat daddy Posts: 2,605
    an order number is just for tracking purposes .. you need to check the small print out.

    Amazon say this on their orders

    this email is only an acnowlegment of receipt of your order. Your contract to purchase these items is not complete until we send you an email notifying you of dispatch of these items ...... whish is also when they take the money
  • fenixfenix Posts: 5,437
    I dont think your friend has a case. They've not lost out anything have they ?
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  • thistle_thistle_ Posts: 5,605
    fat daddy wrote:
    an order number is just for tracking purposes .. you need to check the small print out.

    Amazon say this on their orders

    this email is only an acnowlegment of receipt of your order. Your contract to purchase these items is not complete until we send you an email notifying you of dispatch of these items ...... whish is also when they take the money

    Some part suppliers that I order from send an invoice or add it to your account and they say:
    "The goods belong to us until payment is received in full" (or similar).
  • mtb-idlemtb-idle Posts: 2,179
    This friend doesn't really exist does he?
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  • fat daddy wrote:
    an order number is just for tracking purposes .. you need to check the small print out.

    Amazon say this on their orders

    this email is only an acnowlegment of receipt of your order. Your contract to purchase these items is not complete until we send you an email notifying you of dispatch of these items ...... whish is also when they take the money

    Some part suppliers that I order from send an invoice or add it to your account and they say:
    "The goods belong to us until payment is received in full" (or similar).

    That's to do with retention of title in case they don't get paid or the company they've supplied goes bust.
  • YIManYIMan Posts: 576
    In my working life if someone gives me a quote and I give them a purchase order, they have to deliver the agreed goods/services for the agreed price. Invoicing and cash exchanging hands is the final part of the transaction, not the start.

    The order acknowledgement in this case contains no small print about the order not being an order until the goods are despatched. Indeed, it starts off by saying my...er I mean my friend's....order has been successful.

    However, even if there isn't some small print somewhere, I guess short of taking them to the small claims court there is no legal way of forcing them to honour their order. I just don't get how a supplier can be so blatant and brazen about just increasing the price of something by 50%.
  • MTB-Idle wrote:
    This friend doesn't really exist does he?

    If they are they are secretly fuming
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  • rolf_frolf_f Posts: 16,015
    So your friend is asking if he can force a supplier to make a loss on a product because they haven't kept track of the circumstances of every last item they keep in stock? Was the friend terribly inconvenienced by this failed order? Possibly the friend ought to just try to come to terms with his grief over the failed order and move on with his life!
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  • fenixfenix Posts: 5,437
    YIMan wrote:
    I just don't get how a supplier can be so blatant and brazen about just increasing the price of something by 50%.

    Was the original item on sale ? So they were clearing old stock maybe ? Thats the usual reason stuff is cheap. It could well be that the new price is just the 'normal' price ?
  • dhopedhope Posts: 6,699
    YIMan wrote:
    In my working life if someone gives me a quote and I give them a purchase order, they have to deliver the agreed goods/services for the agreed price. Invoicing and cash exchanging hands is the final part of the transaction, not the start.

    The order acknowledgement in this case contains no small print about the order not being an order until the goods are despatched. Indeed, it starts off by saying my...er I mean my friend's....order has been successful.

    However, even if there isn't some small print somewhere, I guess short of taking them to the small claims court there is no legal way of forcing them to honour their order. I just don't get how a supplier can be so blatant and brazen about just increasing the price of something by 50%.

    Except a web shop isn't the same as a quote and a PO. If your mate had phoned the shop, they'd gone out to the back of the store and checked they had everything available, then came back and emailed him the details personally, then sold the item to someone else and bumped the quote by 50% to cover a quick replacement item then I could see your mate might be annoyed. But if you substitutes righteous indignation for common sense then you can probably conceive of how the stock count might be wrong occasionally and that it's not really a big deal.
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  • There is no Contract until there is Consideration. If no good or money changes hands, there is no contract.
  • The RookieThe Rookie Posts: 27,748
    Indeed, its the consideration is key, either money or goods, until either happens there is no contract just an agreement.
  • Ian.BIan.B Posts: 732
    There is no Contract until there is Consideration. If no good or money changes hands, there is no contract.
    TheRookie wrote:
    Indeed, its the consideration is key, either money or goods, until either happens there is no contract just an agreement.
    No. You are saying that you cannot have a contract until it is performed. The consideration for the seller's agreement to supply the goods is the buyer's agreement to pay the price.
    OP wrote:
    When is an order a contract
    When (1) the order is accepted, (2) there is consideration (see above), (3) the key terms are sufficiently certain (in this case the goods are clearly identified and the price is agreed) and (4) the parties intend to create legal relations.

    Then you have a contract, but if you have agreed to the supplier's terms and conditions they may have a get out enabling them to cancel the contract - subject to consumer protection rules
    OP wrote:
    I guess short of taking them to the small claims court there is no legal way of forcing them to honour their order
    That's known as sod's law.
  • Ian.B - I think you are confusing Consideration with Intent to Create Legal Relations. There is NO contract until one party has actually given Consideration (goods, services or money). You cannot have a contract until that is performed.
    If only one party offers consideration, the agreement is not legally a binding contract... ...only a person who has provided consideration can enforce a contract. In other words, if an arrangement consists of a promise which is not supported by consideration, then the arrangement is not a legally enforceable contract...
  • YIManYIMan Posts: 576
    The consideration is what is agreed to be exchanged as part of the contract. It doesn't actually have to be exchanged for it to be a contract. That is part of the fulfilment of the contract, not the making of the contract.
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