Lawsuit shows dealers why they should fix ad mistakes quickly
A recent case in Illinois reminds dealers why they should act quickly and decisively when they make a mistake in advertising.
The dealer advertised a vehicle for $19,991. When the customer came to buy it, she was told the real price was $36,991. When she complained, the dealership said the ad was a mistake and offered to sell the customer the vehicle at cost, approximately $35,000. But the customer refused and sued.
The trial court entered summary judgment for the dealership, finding that the mistake did not constitute a valid offer of sale.
On appeal, the customer presented several bait and switch cases and said the court should have granted damages for wrongful activity. But the court said the evidence of the error was so clear that the dealership was entitled to summary judgement.
The case highlights the idea that when dealers make a mistake, they should investigate and be open in saying that it was an error made without an attempt to deceive. The courtês distinction between this case, in which there was ample evidence of clear error by the dealership, and bait and switch cases where there was an intent to deceive, is a reminder that decisive action and transparency are important.
So what should a dealership do about errors in advertising?
« Recognize that an error can be costly even if the dealer ultimately prevails. In this case, the dealer was prepared to sell the vehicle without profit and ultimately had to defend a legal action. The case reminds dealers of the importance of proofreading ads to be sure that pricing, savings and conditions are correct.
« If an error occurs, immediately investigate and be prepared to explain why the error occurred.
« If the error is in an advertised price, post a prominent notification in the showroom that the error was made.
« When a customer seeks the advertised price, make the error clear and describe candidly what happened.
« Be aware of multiple errors. If there is a pattern of errors, someone may think it is being done intentionally. The difference between intentional mispricing and a mistake can be very costly.
Thanks to attorney Michael Charapp of Charapp & Weiss, LLP, for providing this information.Download Bulletin PDF