Can an online shop cancel an order placed at the wrong price? What UK sellers can do, and when it is too late

You change a price list, a decimal point goes missing, and an item that should cost 18.90 shows at 1.89. Orders arrive within minutes. The question is whether you have to send them, and the answer depends on one thing: whether a contract exists yet. This guide explains how to tell, what Citizens Advice says a shop may do, and what to put in your terms so the answer is not left to argument later.

The rule in one paragraph

Citizens Advice, writing for shoppers, says that when you buy online you have a contract and legal rights either once you have paid or once the seller has sent the item, depending on the seller's terms. It also says that once a contract exists a seller cannot cancel because of a pricing error, with one exception: the seller can cancel if it was a genuine and honest mistake that the buyer should have noticed. If no contract has formed yet, the seller keeps the right to cancel when it finds the mistake. So two questions decide your position: has a contract formed, and was the price one a reasonable buyer would see as an error?

Step one: find the moment your contract forms

Read your terms of sale. Many shops write that the order is an offer from the customer, and that the contract starts only when the shop dispatches the goods or sends a message saying the order is accepted. If your terms say that, an automated "we have received your order" email does not form the contract, and a pricing error found before dispatch can be corrected by cancelling and refunding.

If your terms say nothing, or say that the contract begins when the customer pays, then you may already be bound by the time you spot the error. Plain terms help you here. A vague clause will be read against the shop that wrote it.

Step two: check what your confirmation email says

Regulation 11(1)(a) of the Electronic Commerce (EC Directive) Regulations 2002 requires you to acknowledge receipt of an online order without undue delay and by electronic means. Regulation 11(2) says the order and the acknowledgement are treated as received when the person they are sent to can access them. Neither paragraph says the order has been accepted. The regulation also, at 11(1)(b), requires you to give customers a way to find and correct input errors before they place the order.

So an acknowledgement is allowed to say "we have received your order", and your template should say that and no more. A line such as "Your order is confirmed" reads like acceptance. Our guide to what an order confirmation email must include lists the other items the law expects in it.

Regulation 9(1) adds that you must tell customers the technical steps to follow to conclude the contract. That is the natural place to say when the contract forms.

Step three: ask whether the price was an obvious mistake

Where a contract exists, the Citizens Advice exception is narrow: a genuine and honest mistake that the buyer should have noticed. A coat at 1.89 that sells everywhere else for 189 is easier to defend than a 15% slip on a mid-priced item. Do not rely on this exception for a close call. Keep the evidence: a screenshot of the listing, the price-list change, the time of the edit and the time you corrected it.

What to do on the day

1. Fix the price at once and note the time.
2. List every order placed at the wrong price, with its order time and whether it has shipped.
3. For orders not yet dispatched where your terms say the contract starts on dispatch, cancel and refund in full by the original payment method, and tell the customer plainly what happened.
4. For orders already shipped, assume a contract exists. Weigh the exception above, and consider whether sending the goods is cheaper than a dispute.
5. Do not offer a replacement coupon as a pressure tactic. Say what you are doing and why.

Refunding the whole payment, delivery included, avoids a second complaint about the cancellation itself. Where the headline price omitted postage, see our guide to postage in the headline price, because a separate rule covers that.

The cost of getting it wrong, worked through

Our example uses invented figures. An item costs you 18.40 to buy in. You meant to list it at 18.90, but a decimal slip put it up at 1.89. In the hour before you notice, 37 orders arrive.

• Honoured: 37 orders at 1.89 bring in 69.93. The stock cost is 37 times 18.40, which is 680.80. The loss is 610.87, before postage and payment fees.
• Cancelled before dispatch under terms that start the contract on dispatch: nothing is shipped, the loss is 0.00, and you owe 37 refunds of 1.89.

The gap between those two outcomes is why a clause in your terms, written before the mistake, is worth more than any argument after it.

Terms to write now

• State that an order is an offer, and that you accept it only when you dispatch the goods or send a message saying so.
• State that you may cancel an order placed at an obvious pricing error, and will refund everything paid.
• Keep the first email to "we have received your order".
• Add a price check to your Black Friday routine; our Black Friday and Christmas checklist is a sensible place for it, because bulk price edits are when slips happen.

Your returns terms should sit in the same place; see the returns policy template.

We have not tested any of this in court and no case is cited, because the page we relied on is guidance. Whether a clause is fair, or whether a contract formed, depends on the facts and your exact wording. This page is general information, not legal advice.

Overlyft sets up AI assistants for online shops: they can check a price-list change against the last one and flag a large drop for a person to confirm before it goes live. None of this guide depends on them.