A Mistake or Something More? - Greater Cincinnati Automobile Dealers Association

A Mistake or Something More?

By Shelley B. Fowler*

No matter how hard we try to avoid them, mistakes happen. Sometimes mistakes made at a dealership are no big deal and can be remedied fairly easily, with little to no harm to the dealership or its customers. But many mistakes can present big threats. In a recent case, a dealership’s advertising mistake resulted in a lawsuit, which cost it money to defend, but it did not result in liability for the dealership. Nevertheless, the mistake the dealership made in misadvertising the price of a car could have been a bigger deal, especially if, in an effort to lure customers into the showroom, the dealership had the bad habit of advertising cars for prices lower than it actually intended to sell them.

Carla Burkhart saw a vehicle advertised online by Wolf Motors of Naperville, Inc., for $19,991. Burkhart told the dealership that she wanted to buy the vehicle at that price, but the dealership said that the advertised price was a mistake and that the vehicle was actually $36,991. The dealership subsequently offered to sell Burkhart the vehicle “at cost,” which was $35,000. Burkhart refused the offer. She sued the dealership for breach of contract and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The dealership submitted evidence that the correct price for the vehicle was $36,991 and that the advertised price was a clerical error on the part of an employee who entered an incorrect price for the car into a database. The trial court granted summary judgment for the dealership, finding that no contract was formed between the parties because there was no mutual assent and that there was no fraud. Burkhart appealed.

The Appellate Court of Illinois affirmed the trial court’s decision. The appellate court rejected the breach of contract claim because a valid and enforceable contract did not exist. The advertisement did not serve as the basis of a binding contract between Burkhart and the dealership because the advertisement was not an offer to contract and did not reflect a price for which the dealership intended to sell the vehicle.

The appellate court then addressed whether the dealership committed fraud when it advertised the vehicle without intending to sell it at the advertised price. Even though the appellate court acknowledged that certain evidence supported some of the elements of a cause of action for fraud, it concluded that there was no evidence that Burkhart suffered specific actual damages, thereby precluding her claim under the ICFDBPA. The appellate court rejected Burkhart’s argument that her damages were the difference between the advertised price and the appraised value of the car.

So, in this case, the dealership was relatively lucky. But not all dealerships that make similar mistakes will get off as easily. You should check and double-check your advertisements before they are disseminated. If, more than once, you advertise a car for less than you intend to sell it, your “mistake” may start to look a lot more like “fraud.”

Burkhart v. Wolf Motors of Naperville, Inc., 2016 Ill. App. LEXIS 630 (Ill. App. September 21, 2016).

*Shelley B. Fowler is a Managing Editor of the CARLAW, HouseLaw, PrivacyLaw, InstallmentLaw, and Spot Delivery publications.  Shelley is located in the Hanover, Maryland office of Hudson Cook, LLP/CounselorLibrary.com.  Shelley can be reached at 410-865-5406 or by email at rfowler@hudco.com.