It is not entirely clear to me that UAL's former legal position was
obviously wrong (although its value may well have been outweighed by the
negative publicity).

It would seem to me that UAL made a unilateral mistake that would have had
a material effect on the agreed-upon exchange.  That can give rise to a
defense, where the contract would be unconscionable or the other party has
reason to know of the mistake.  (There are some additional conditions to
the defense, which are not applicable in this context.)

As suggested by Michael's comments concerning Dell's web site, I would have
thought that a person who saw these extraordinarily low prices would have
had reason to know of the mistake.  That appears to be the basis of UAL's
former position; one of the stories identified by Ken states UAL was
arguing "anyone who spotted the near-giveaway fares at ual.com should have
known that the prices--$24.98 for San Francisco to Paris, for example, with
similar deals for flights to Hong Kong and other cities--were too good to
be true."  Alternatively, UAL could well have argued the contracts would
have been unconscionable, even though UAL is a sophisticated party (See
illustrations accompanying Restatement (Second) of Contracts Section 153).

Royce


At 09:30 AM 2/20/2001 -0500, you wrote:
>Yesterday UAL reversed its earlier decision and decided to honor the 143
>reservations made at the mistaken prices.
>
>The company maintains that it believes it's on "solid legal ground" but says
>it's doing this as a "customer satisfaction issue."
>
>Myself, I think UAL's legal position would've been pretty shaky.
>
>Here are two links to the relevant news articles.
>
>Ken
>
>
>http://news.cnet.com/news/0-1007-200-4868458.html
>http://www0.mercurycenter.com/svtech/news/breaking/merc/docs/066884.htm




* * * * * * * * * * * * * * * * * * * * * * *
Royce de R. Barondes
Assistant Professor
206 Brooks Hall
University of Georgia
Athens, GA 30612
Tel.: (706) 542-2166
Fax: (706) 542-4295
Home:  www.legal-environment.com
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