$5 Business Class: a lesson in Contract law

Irish Airline Aer Lingus mistakenly offered transatlantic return business class fares for 5 euros.

They certainly look silly but what are their legal obligations?

Aer Lingus said:

"It is a genuine mistake, a fundamental mistake on our part. We rectified it as quickly as we could. We have contacted the customers and given them the opportunity to re-book. To sell a business class flight for a fiver... that is a genuine mistake, people are going to know that there is something up. It is really a case of 'if it looks too good to be true, it probably is too good to be true'."

There is no doubt that the airline was mistaken by offering the fares (they usually go for 1775 euros each way, making the 5 euro fare a saving of 3545 euros), although it is not necessarily that obvious that it was a mistake to a customer, what with all the crazy promotional fares the airlines offer (many $1, I have seen a 1c).

The Irish Consumers' Association said:

"The offer was made, it was accepted by Aer Lingus. Consumers booked and paid to bind the contract."

There was a contract here, but it is not as simple as saying, they paid the contract has to be enforced. I checked out the terms and conditions on the Aer Lingus website to see what the contract would look like. Fortunately for Aer Lingus their terms do seem to allow them to cancel a reservation on notice to a customer (see clause 7.1), which they have given. I believe, and I am going on hazy reading the terms while waiting for my flight memories, that most airlines contain similar clauses.

If there was no clause in the terms and conditions allowing the airline to cancel the contract, Aer Lingus would have had to rely on the doctrine of mistake (see the infallible wikipedia article, it is a good general description at least). As it was a unilateral mistake (i.e. only Aer Lingus was mistaken as to the price, the customer knew accurately that the price was 5 euros) the contract would only be avoided if the customer was aware that Aer Lingus was mistaken (this is debatable as although the fares were low, very low fares are not unheard of) and was taking advantage of that mistake.