Reference no: EM131232827

Dreamworld Airlines (DWA) initiated a new promotion to boost its ticket sales after a decline in travel due to fear of terrorist attacks. It posted an ad on its web site offering fares as low as $25.00 round trip to major European cities. Customers would click on a link in the ad that took them directly to the booking page. The super low fares were available for about two hours before a DWA employee reported seeing them to a supervisor. The fares were actually supposed to be ten times higher, apparently due to an error that occurred during the process of uploading the information to the site. Thus, the $25.00 fares were intended to be $250.00. During the two hour period, 547 people purchased tickets. DWA promptly notified the customers of the error, and offered them the option of paying the corrected price or receiving a refund. These events were immediately reported in the press. Several purchasers who were interviewed, stated that they intended to hold DWA to the low price. At least one customer already filed a lawsuit against DWA for misrepresentation. The CEO of DWA is concerned about the loss of revenue from these fares added to its poor sales this quarter. If all of the tickets had been sold at full price, the airline would have come close to meeting its target for the period.

1. Was there a contract between DWA and the customers? If so who made the offer and who accepted it?

2. The terms of use of the site appear as a link at the bottom of the DWA homepage and include the following: The information presented on this site was prepared by Dreamworld Airlines. No representations are made with respect to the accuracy or completeness of the information. Because of the possibility of errors, outdated information or information that is incomplete as posted, Dreamworld Airlines encourages you to verify the accuracy of any information on the site by calling our Customer Relations Office- Web Division at 999-888-7777. You should do this before taking any action on reliance on any information on this site. Dreamworld Airlines makes no warranties concerning the information on this site, and specifically disclaims any liability for injury or damages that result from any action taken by any person in reliance on the information posted on this site. Will these terms permit DWA to dishonor the fares? Make any recommendations regarding these terms that you think are warranted as a result of this situation.

3. Several of the airline tickets were purchased by college students, and apparently, at least two of those students were under 18, but had credit cards. While it is not an issue for this dispute, how can DWA assure itself that its customers are adults, or, in the alternative, if any minors do contract for tickets, that those minors will not be able to disaffirm their contracts with DWA.

4. What recommendation do you have for the CEO, keeping in mind the law, the ethical obligations of the parties, and the reputation and financial success of DWA.