See also: Tesco CIO Mike McNamara profile
Tesco is not legally-bound to supply the new Apple iPad at the wrongly-advertised price of £49.99, due to its watertight terms and conditions, lawyers have said.
On Tuesday (13 March), the company's e-commerce site Tesco Direct crashed as customers tried to take advantage of the bargain price for a tablet that is now correctly listed at the price of £659. Tesco said the low price was due to "an IT error" and has refused to honour the sales.
Under contract law, a contract is only binding if a seller accepts a purchase order.
Tesco's terms of conditions clearly spell out that a binding purchase contract is only made and accepted at the point of despatch. Tesco's example highlights the important role of terms and conditions in protecting e-commerce businesses from risks.
Danvers Baillieu, senior associate at law firm Pinsent Masons, said that other businesses selling online should view Tesco's case as a reminder to review their own terms and conditions.
He said: "A lot of businesses think about terms and conditions just as a page that comes up. Review the terms and conditions and say when the contract is formed, and make it clear.
"It's also important to review email communication you have with a customer after an order has been placed to make sure you can subtly, and in a customer-sensitive way, get out of it because people do voice it quite vocally if they feel hard done by."