A Toronto man was shocked when a BMW dealership revoked a buy-back offer for his car, blaming an AI chatbot that made the offer by mistake. The dealership later reinstated the deal, but the incident highlights the risks businesses face as they adopt AI tools.
The Incident
After his 2021 BMW needed major repairs, Zack Giacomelli contacted BMW Toronto to sell it back. He received a text from "Quinn," who seemed empathetic and offered $27,162.79—exactly what Giacomelli owed. But moments later, a sales consultant called to revoke the offer, explaining Quinn was an AI chatbot that made the offer in error. The real offer was over $7,000 less.
Can AI Enter Into Contracts?
Canadian law holds companies liable for their AI's mistakes. In a 2024 case, Air Canada was forced to honor a fare rebate after its chatbot gave incorrect advice. The tribunal ruled the airline was responsible, not the chatbot. "Just like an employee may do something wrong and the company's held responsible, a bot is just like an employee," said litigation lawyer Tanya Walker.
Dealership Reverses Course
After CBC News contacted BMW Toronto, the dealership reinstated the original offer. Sales manager Scott Shadbolt said a human employee miscommunicated the amount owed, and the AI "ran with that." He noted the dealership is now ensuring customers know when they interact with AI and will only have humans present buy-back offers.
More Trouble Ahead?
With 12% of Canadian businesses using AI (up from 6% in 2024), disputes like this may become common. Companies must be prepared to stand by their AI's actions. "A human decided to deploy the chatbot... when they make mistakes, you have to be willing to own up to that," said professor Gus Skorburg.
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