Here’s something interesting that happened recently: customers of online retailer Zavvi ordered a new game called Tearaway but the retailer mistakenly shipped out to them the game AND a (much more valuable) PlayStation Vita handheld console (see here). They realised their mistake and have since apparently threatened legal action against customers refusing to return the goods.
So here’s a classic legal question for you: when you give someone something different to what either of you were expecting, what happens? Who’s in the right?
Legal answer: Zavvi. Real world answer: the customers (probably). Here’s why.
The legal side:
This is fairly simple actually. If we agree that I’ll sell you X, but actually I give you Y and you know it, then you cannot keep it if I ask for it back. Let’s say we agree I’ll sell you a toy car, and you pay for a toy car, but instead you get an actual car. In this situation, the law says that you cannot retain the real car because you would receive a benefit far beyond what you actually paid for. You have been “unjustly enriched”, as the law puts it. As a result, I would be permitted to go to court to force you to return the benefit you had unjustly received. It’s not a defence that I’ve done something stupid (or, put it another way, two wrongs don’t make a right).
Another legal principle that is often relevant in these kinds of situations is the principle of mistake. If I make a mistake regarding the terms of a contract, for example if I pay far too much or sell something when I meant to sell something else, then generally speaking courts will enforce that contract UNLESS the other party is clearly exploiting the mistake for their own benefit.
It’s clear how this applies to Zavvi. They gave a much more valuable product away than they had expected to. They didn’t realise the mistake until after the products had been shipped out. By contrast, the receiving customers would have realised the mistake immediately upon receiving them – they would know they had received something of much greater worth than they should have. It looks to me like Zavvi made a unilateral mistake and that for customers to take advantage of it would constitute unjust enrichment.
What about consumer rights?
One article I saw suggested that at least one customer had tried to defend his/her retention of the products on the basis that they were “unsolicited” and therefore UK legislation meant that customers could keep them (to be precise for legal buffs, we’re talking here about the Unsolicited Goods and Services Act 1971 as amended by the Consumer Protection (Distance Selling) Regulations 2000.) Basically, that legislation says that if you receive unsolicited goods you can keep them and it may even be a criminal offence for the sender to demand them back.
I was going to leave it at this, but I’ve received tweets asking me about this legislation specifically. So here’s what it (specifically regulation 24(1) which you can read here) says: if (a) “unsolicited goods are sent to a person (“the recipient”) with a view to his acquiring them; (b)the recipient has no reasonable cause to believe that they were sent with a view to their being acquired for the purposes of a business; and (c)the recipient has neither agreed to acquire nor agreed to return them”, then “The recipient may, as between himself and the sender, use, deal with or dispose of the goods as if they were an unconditional gift to him”.
So the Distance Selling Regulations say expressly that if you receive “unsolicited goods” with a view to acquiring them AND you have “no reasonable cause to believe that they were sent with a view to their being acquired” AND you have “neither agreed to acquire nor agreed to return them” then you can keep them as an “unconditional gift”.
But that’s not the situation with Zavvi, I’m afraid. If you receive goods in the mail without ever asking for them, they’re “unsolicited”. If you order something by mail and get it, or even if you get something different than you expected, they are not “unsolicited” and you would have “reasonable cause to believe that they were sent with a view to their being acquired..” The legislation talked about above was originally intended to deal with unscrupulous people in the 1960s and 1970s who would send you unsolicited goods by mail and then demand payment for them by scaring you with threats of legal action. Then it was updated in 2000 to deal with the same tactics in the new online world But Zavvi was engaged in nothing of the sort, from the press reports we’ve seen at least.
The real world answer:
Zavvi was between a rock and a hard place here. On the one hand, they were about to suffer a loss because of what was probably an administrative error and why shouldn’t they seek to reduce that loss? On the other hand, unless this was a mistake involving large numbers of units, would the financial loss involved really be worth the PR mini-storm they have just cooked up? Besides which, why punish loyal customers for an internal error? Sounds like a finely balanced argument to me, to put it mildly.
Regardless though of where one stands on that particular debate, the main point is this: Zavvi were entitled to do what they did as a matter of law. One might not agree with them actually exercising their legal rights here rather than just write the whole thing off as a mistake, but that was their decision to make and they’ll have to answer to their customer base for it.
UPDATE: the BBC has an interesting article on this with some quotes from the UK’s Citizens Advice Bureau and others.
Test
Test!
Under the Distance Selling Regulations, does “being acquired _for the purposes of a business_” mean that there is a difference between receiving goods as a consumer, eg at home, and receiving goods that are anticipated to be used by you in a business?
This happened recently in canada where people bought a couch set for x amount when really it was a price error and was supposed to be $1000 more.
They asked people to return them or they would be charged the difference. They were then offered pretty much $200 off the same set IF they went and returned it first (idiots)
In the end I don’t know what happened.