## Facts

- A newspaper advertisement by an automobile dealer listed a specific used 1995 Jaguar XJ6 Vanden Plas, identified by VIN, for $25,995.
- The next day, Brian Donovan went to the dealership, located the advertised vehicle on the lot, and test-drove it with permission.
- Donovan told the salesperson he would buy the car for the advertised price and offered to pay the full amount.
- The dealer refused, stating the advertised price was a mistake, and demanded approximately $37,016 instead.
- The pricing discrepancy resulted from an advertising error that caused an earlier, lower figure to be printed, and the printed price was substantially below the dealer’s intended price and below wholesale.
- Donovan sued for breach of contract; the municipal court entered judgment for the dealer, finding no contract due to mistake, and Donovan appealed.

## Issues

1. Whether an advertisement for a specific used car at a definite price can constitute an offer capable of acceptance by tendering the purchase price.
2. Whether California Vehicle Code § 11713.1(e), which prohibits a dealer from refusing to sell a vehicle at its advertised price while unsold and before the ad expires, affects whether such an advertisement is an offer.
3. Whether a pricing error in the advertisement prevents contract formation or otherwise defeats enforcement at the contract-formation stage.

## Decision

- The Court of Appeal reversed the municipal court’s judgment for the dealer.
- The court held the advertisement could constitute an offer under the circumstances, including the statutory framework and the ad’s specificity (vehicle and VIN plus a definite price).
- The court held Donovan accepted by tendering the full advertised price, forming a contract.
- The court rejected the dealer’s argument that the pricing error, standing alone, prevented contract formation in light of the statute and the facts presented.

## Legal Principles

- Although advertisements are generally treated as invitations to negotiate, a sufficiently definite advertisement for a specific item at a fixed price may be treated as an offer when context supports a reasonable expectation of assent upon tender.
- California Vehicle Code § 11713.1(e) informs contract analysis by imposing a legal duty on auto dealers not to refuse to sell a vehicle at its advertised price while the vehicle remains unsold and before the advertisement expires.
- In this statutory setting, a consumer’s tender of the advertised price may constitute acceptance, and a dealer’s unilateral pricing error does not automatically negate contract formation.

## Conclusion

The Court of Appeal held that, given the advertisement’s specificity and the consumer-protection policy reflected in Vehicle Code § 11713.1(e), the dealer’s newspaper ad could operate as an offer, Donovan’s tender at the advertised price constituted acceptance, and the dealer could not defeat contract formation merely by claiming a pricing mistake.


Donovan v. RRL Corp. I, 88 Cal. Rptr. 2d 143 (Cal. Ct. App. 1999)