From: tzs@carson.u.washington.edu (Tim Smith)
Newsgroups: misc.consumers
Subject: Re: KMart's policy if items scan at the wrong price.
Date: 22 Jan 1993 12:34:54 GMT
Organization: University of Washington School of Law, Class of '95
NNTP-Posting-Host: carson.u.washington.edu

In article <1_k3+rp@rpi.edu> wrf@ecse.rpi.edu (Wm Randolph Franklin) writes:
>
>In article <1jlsp6INNhc@shelley.u.washington.edu> on 21 Jan 1993 10:09:42 GMT,
>tzs@carson.u.washington.edu (Tim Smith) writes:
>
>  >  $1.77
>  > -$1.42
>  > ------
>  >  $0.35
>  > 
>  > I'd be very curious to hear under what theory you claim that $0.35 is not
>  > sufficient restitution.
>
...
>Kmart is committing a crime here since they made on offer, on the shelf,
>and I accepted it, by taking the item to the cashier.  That makes a
>contract.  Then they try to charge more and hope I don't notice it.

[The following assumes no statute applies]

You are starting off with a fundamental misconception.  Breaching a
contract is not a crime.  In fact, contract law *ENCOURAGES* the
breach of contract!  The legal consequences of a breach are that the
breacher will basically have to pay damages.  Damages are basically
awarded to cover the expectation interest of the injured party.  There
is almost never a punitive damage award under contract law.  To give
an example, suppose we make a contract for me to sell you a computer
for $2000.  When you come to pick it up, I say "Sorry, I sold it to some
other guy for $5000.  Here's your $2000 back."  You really need a computer,
so you go to a computer dealer and buy an equivalent sytem for $2500.  When
you sue me, you will get $500 (the difference between the $2500 you had to
pay and the $2000 you would have paid to by from me).  Note that I made an
extra $2500 by breaching my contract with you.  The law is happy with this,
because we have achieved an efficient allocation of resources.  If you had
bought a computer from a dealer for $1800 instead of $2500, you wouldn't get
anything!  (I'm leaving some things out here for simplicity: you could get
back reasonable costs of finding the computer, and if I knew you were buying
the computer because you had to do something by a certain time, and my
breach delayed that while you found another computer, you could possibly get
something for that, too).

Another problem here is with the claim that there was a contract.  The
law is not settled on whether they made an offer.  Until recently, a
display on a shelf was considered to be in the same category as a newspaper
ad or a catalog ad.  Those are *NOT* offers -- they are invitations.
(Sometimes, a newspaper ad will become an offer -- ads that advertise a
definite quantity and specify definite persons ("The first ten customers
tomorrow") have been found to be offers.)  There has been a recent trend
to hold displays on shelves to be offers, but the situation is not clear
right now.

If there is an offer, then there is the problem of when it is accepted.
Is picking up an item and placing it in your basket an acceptance?  If
not, then the store would be free to change the price at any time up until
you paid for it.  On the other hand, if placing the item in your basket
was an acceptance, then the store could sue *YOU* for breach of contract
if you changed your mind before getting to the cash register and tried to
put the item back!

(I would guess that courts would find that placing the item in the basket
creates an option contract, allowing you to take the item to the cash
register and buy it for the price marked on the shelf, but I've not looked
for any cases on this.)

Furthermore, even if there is an offer to sell for $1.42, that doesn't
prevent them from making other offers at the same time.  The person at
the cash register made an offer to sell for $1.77.  If you hand them
$1.77, but think you are accepting the $1.42 offer, then the best that
happens for you as that the acceptance doesn't count -- you get the $1.77
back, and they keep the item.

Now if we are following the "you accepted when you took it from the shelf"
theory, the best I can come up with for you is that they breached when they
asked for $1.77, you covered the breach by buying for $1.77, and so you are
entitled to the difference between the contract price ($1.42) and the
price you had to pay to cover the breach ($1.77).  So you get $0.35.

At this point, we should look at the UCC, but it's not going to change
much.  In particular, the damages won't be changed -- the only stuff in
the above that might change under a UCC analysis would be whether or not
there was a contract.

>
>If someone steals something from me, I'm not satisfied by the article's
>return.  I want the thief punished.  This is especially needed in crimes
>like this to deter others.

Unless there is a statute that they violated, there was no crime.  If there
was a statutory violation, then the State gets to punish them.  You still
only get $0.35, unless the statute calls for you to get something else.

--Tim Smith
Newsgroups: misc.consumers