Canadian Court Sides With Dell Against Class Actions

An anonymous reader writes "Michael Geist reports that the Supreme Court of Canada has just issued a new online contracting decision that removes the ability for consumers to challenge mandatory arbitration clauses found in e-commerce contracts. (Decision is here.) The case involved a lawsuit against Dell Computer, which refused to sell hundreds of mistakenly priced computers purchased on their website. Dell tried to sidetrack a class action by claiming that all consumers were required to enter arbitration due to a clause buried in its contract via a hyperlink. Geist explains why the ruling may not be as unfavorable for Canadian consumers as it seems at first, in part because some provinces have already passed laws banning e-commerce sites from blocking class-action suits."

Re:Good idea

[Anonymous Coward]

then they cry when the deal they KNEW couldn't be true, wasn't true.

I bet you're all for personal responsibility too, up until the second you have to take some, eh? A website makes a pricing mistake, they cry when people try to hold them to it.

Re:Advertised price != actual price?

[Harmonious Botch]

I was under the impression that the price at which a product was advertised was the price at which it must be sold?

Almost. They must honor all but mistakes and vandalism. If they make an honest mistake ( and sometimes a judge has to decide whaether or not it is an honest mistake ) they do not have to honor it. Nor do they have to if someone alters their pricing for them.

Re:Advertised price != actual price?

[smeagols_ghost]

In Australia, supermarkets (and places that bide by the supermarkets code of practice, like servos,7-11 ect) for products under $50 must give you the first item which scans at the wrong price (or labeled incorrectly) free (if you know to ask) and subsequent items at the correct price.

Re:Good idea

[ILuvRamen]

what if they didn't know it was a mistake? I just about crapped myself when I was the $400 off laptop deal a few months ago and I bought one for waaaaaay under what any Acer would cost. Just how low was the price mistake? If it was like $150 for a new, decent PC then yeah, these ppl are idiots but if it was $600 for an $800 machine then I wouldn't think of it as a glitch, I'd think it was another sweet sale, especially if it was at the time of the month/year/quarter that they usually do that kind of a markdown.

Quebec is Different

[Hal The Computer]

This decision is not very applicable to the rest of Canada because Quebec is a civil law jurisdiction (like Continental Europe and Louisiana). The court looks to the Civil Code of Quebec to decide the case.

In the rest of the provinces, the court looks to the "common law", that is to say, rulings in previous cases. This is similar to England and most of the United States.

If you read the supreme court's decision, it relies heavily on the Civil Code of Quebec.

Of course, I am not a laywer and this is not legal advice. If you want advice, pay for it.

Re:Where would KDawson move?

[panopticonisi]

Thank you. Off-topic: Drove upon drove of liberals I knew had planned on moving to Canada, pending election results, but as election results were posted, they all suddenly changed their minds. Well, it's a free country and they're allowed to do that. It doesn't, however, speak strongly for their message, if they don't stick to their principles and threats when push comes to shove. On-topic: I really feel that mistakes should be punished. If Dell mistakenly posts an item below cost, it is their cross to bear when sales of that item soar. Every store is run on this principle. Brick-and-mortar stores are held to their price tags by their guarantee of customer satisfaction and the BBB. This story of Dell taking these customers to court should dispel any notion that Dell offers superb customer satisfaction. In turn, as their image starts to falter, they'll start to lose sales. Eventually, Dell will reap what it sows. That's the way it should work, anyhow.

Re:Good idea

[Dunbal]

Well look, the Canadians weren't much help in WWII and they still are useless.

      I dunno, for less than 10% of the US population, Canada seems to manage to hold its own. Also it looks like you've never heard of the 1st Canadian Army, consisting of over 200,000 men in 3 infantry divisions, 2 armored divisions and 2 armored brigades. Those guys only had to deal with crack SS divisions at Caen while the Americans took their sweet time capturing Cherbourg. Guess who won.

      However I shouldn't expect a yankee to know much about history.

Re:Good idea

[p0tat03]

May I also mention that the 10% of the US population captured 25% of the beaches on D-Day? :P

Unenforcable in the UK

[Anonymous Coward]

Statutory Instrument 1999 No. 2083
The Unfair Terms in Consumer Contracts Regulations 1999 [opsi.gov.uk]


Terms
          5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

        (2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

        (3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

        (4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

        (5) Schedule 2 to these Regulations contains an indicative and non-exhaustive list of the terms which may be regarded as unfair.

Assessment of unfair terms
          6. - (1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

        (2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate-

            (a) to the definition of the main subject matter of the contract, or

            (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.

Effect of unfair term
          8. - (1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.

        (2) The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term.

SCHEDULE 2
Regulation 5(5)

INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

          1. Terms which have the object or effect of-

(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.

Re:Good idea

[mr_matticus]

Unless new legislation has passed since I was there last, this isn't true. It's true for sundries and food below $50 or $100. It certainly does not apply to electronics at AU$1000, or to my knowledge, to electronics at all.

Websites are not responsible for pricing errors as long as it's caught prior to completion of the transaction. The key there is completion of the transaction--that's not when you click "buy" or when your card is authorized for the amount. It's when the product is invoiced and has shipped. If they don't catch it in that time, you're clear. But 99% of the time, they catch it between ordering and invoicing (most companies review invoices before issuing them for just this very reason since the process up until that point is wholly automated).

If such an error occurs after an order is placed, they will contact you. You can choose to accept the higher price and continue, cancel the order, or seek some sort of comp/freebie for the trouble. Just like you don't create a contract when you place an offer on a house or call in an order at a restaurant, clicking "buy" on a website doesn't complete a contract. It initiates one. For example, if your card is declined or if the product is out of stock, that's the end of it. A contract is not in place until your money has been taken (not merely authorized) and an irrevocable invoice for a product has been provided to you.

Wrong

[Hal The Computer]

This has so many errors I don't know where to begin.

• The Supreme Court of Canada is Canada's final court of appeal, the last judicial resort for all litigants, whether individuals or governments. [scc-csc.gc.ca] You haven't been able to appeal to the law lords in canada for decades.
• Canada doesn't have any "states", only provinces and territories.
• using the expression "some states" is using weasel words, which states are you talking about, do you have a source for your unsubstantiated blather?

Uh.. not so bad.

[sudog]

This is a case where the original user tried to rip Dell off by using a deep-link URL to bypass the normal storefront and get a $549 computer at $379. Meanwhile, it's a decision that applies to grandfathered contracts anyway, since Canada now has the Consumer Protection Act which "prohibits" contract clauses that "oblige a consumer to refer a dispute to arbitration."

Additionally, the action the *consumers* brought against Dell was a result of Quebec-specific consumer protection laws.

Finally, the Court specifically mentioned that courts still have the right to "refer" the matter to arbitration, which implies that the right to have a court actually hear such a case to begin with hasn't been removed. Besides, the decision states it even more clearly: "Before departing from the general rule of referral, the court must be satisfied that the challenge to the arbitrator's jurisdiction is not a delaying tactic and that it will not unduly impair the conduct of the arbitration proceeding."

The Court here when it says "referral" is specifically describing the right of a lower court *not* to refer the matter to arbitration if it so decides to.

So.. uh.. wtf?

Re:Flame war about a 200-year-old war?

[GraZZ]

We were the British in 1812.