Gemstone jewellers suffered a technical malfunction on their website that reduced the price of all the items on its website to just £9.99 overnight.

Diamond rings and other expensive items such as watches that cost thousands of pounds were reduced to less than £10 at the online checkout.

A media frenzy quickly escalated, with customers posting on Instagram and Twitter that they had managed to purchase a variety of expensive items at a massive discount.

The management team were horrified when they were alerted to this issue. The website was closed down the following morning to correct the technical error.

Many customers had ordered goods for collection using the click and collect option, and picked up their purchases from Gemstone jewellers stores from 9am the following morning.

When the management team realised the mistake, they told staff not to hand over orders.

Layla, a customer who had placed an order wrote on a deals website “when I arrived to collect my order, a member of staff at the company had threatened to charge me the full amount for the goods. Surely this is not my problem that they have poor IT functions!”

Another customer, Charlie said "Gemstone just called me and said if I don't bring the items back and get refunded what I've paid they are going to charge me the full amount. I have a receipt. Are they allowed to do that? Please help me, I can’t afford to pay thousands of pounds."

But later the company said in a statement: "We have reviewed all transactions and those customers affected are being contacted today and issued a refund. This does not affect any customers that have already received a delivery or collected their goods."

Lynne, 65, of Sully in Penarth, bought a sterling silver watch for her husband, which has a retail price of £999.99, for just £9.99.

She was sent a confirmation email and a shipping invoice which said the item had been “quality checked and packed, and [is] now on the way to you.”

Lynne said: “It seemed like too good a deal to ignore. It’s obviously disappointing they won’t honour it.”

Required:

1. What is the legal position regarding both Gemstone jewellers Limited and the customers who have ordered goods at the really low prices?
2. Include details of all the elements needed to form a contract.
3. Does it make any difference whether the goods have been delivered or not?