A Car Dealer’s Nightmare:
The Advertised Price Was Wrong!
Have you ever wondered whether an advertisement for a
specific used car, at a particular price, constitutes an offer
that can be accepted by simply tendering the purchase price? The
California Court of Appeal recently had to wonder about that very
question!
In this adventure, we find our hero, Brian, searching
through his Saturday local newspaper, the Daily Pilot, for used
automobiles. Brian discovered a number of used cars for sale by
a dealership in Westminster, California, one of which was for a
1995 Jaguar XJ6 Vanden Plas, with a specific vehicle
identification number, which for $25,995.
The following day, Brian and his wife drove to the
dealership to see the automobile described in the advertisement.
With the permission of a dealer representative, Brian and his
wife took the car for a test drive and returned to state that he
would take the car for the advertised price.
The representative, however, immediately told Brian that the
price was a mistake. An exchange ensued in which Brian accused
the representative of engaging in a bait-and-switch advertising
scheme. He was thereafter referred to the sales manager.
Brian offered to write a check for the full amount of the
advertised price of $25,995. The manager, however, indicated
that he would only sell the vehicle for $37,016. After some
correspondence, Brian filed suit.
During the trial, the dealer’s advertising manager testified
that the weekend preceding the Saturday upon which Brian had read
the advertisement, the car had been advertised without a price.
During the intervening week, on Tuesday, she instructed the Daily
Pilot to run the same advertisement again. On Thursday, however,
the manager called the Daily Pilot to instruct that the ad be
replaced with one for a 1994 Jaguar XJ6 for $25,995. The manager
did not see a proof sheet available on Friday for the new
advertisement scheduled to run on Saturday because she did not
work on Fridays.
The composing room of the newspaper apparently made a
typographical error which resulted in the 1995 Jaguar Vanden Plas
being advertised at the price intended for the 1994 Jaguar XJ6.
Brian lost at trial and appealed to the appellate courts.
The Court of Appeal observed that advertisements are customarily
treated as invitations to bargain, and not offers. The Court
noted, however, as follows:
“The advertisement did not merely indicate
that a generic lot of 1995 Jaguars were
available for sale at $26,000; rather, it
offered a specific, unique automobile for
that price. There was nothing to indicate in
the advertisement that the prospective buyer
needed to do anything other than tender the
purchase price.”
In addition, the Court of Appeal noted a code section buried
in the deep recesses of the California Vehicle Code, which makes
it unlawful for an automobile dealer to “[f]ail to sell a vehicle
to any person at the advertised total price . . . .”
The California Motor Car Dealers (CMCD), with concern for
one of its members, and the Times Mirror Company, similarly
concerned for a fellow publisher, each filed a brief as amici
curiae (friends of the court, but in this case, more
specifically, friends of the defendant car dealer) .
The CMCD argued, in support of the theory that
advertisements are invitations to bargain, that
“a number of non-price issues, such as the
amount of the down payment, financing,
warranties, trade-in allowances, insurance,
delivery dates, service contracts, title and
registration issues, pollution control
certificates, taxes, and statutory notices
and warnings are normally negotiated in
connection with the purchase of an
automobile.”
The Court of Appeal responded, however, as follows:
This may be true in general; it was not true
in this case. If plaintiff had sought to
negotiate any such matters, he would have
been making a counter offer. He did not
attempt to negotiate any terms; he merely
indicated a willingness to tender the
advertised purchase price. If he was willing
to buy the car without financing, without a
trade-in, without warranties, there is no
principle of law requiring him to do
otherwise.”
Although the error was determined to be in “good faith,” the
Court of Appeal concluded that the defendant car dealer’s
“negligence contributed to the placement of
the erroneous advertisement. The evidence is
uncontradicted that defendant had an
opportunity to review a proof sheet of the
advertisement and chose not to review it.”
The Court of Appeal thus concluded that because of the
obligations under the Vehicle Code “pertaining to advertisements
placed by automobile dealers . . . a dealer has a heavy
responsibility to ensure that advertisements are error-free.” As
a result, the case was sent back to the trial court to determine
Brian’s damages (most likely, the price differential between the
vehicles).
The moral of the story? If you are advertising a car, or
for that matter, anything else, in a newspaper for sale, with
apologies to Martha Stewart, proofreading is “a good thing!”
[This column is intended to provide general information only and
is not intended to provide specific legal advice; if you have a
specific question regarding the law, you should contact an
attorney of your choice. Suggestions for topics to be discussed
in this column are welcome.]
Reprinted from New Era Magazine
Myles M. Mattenson © 2000-2002
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