Last month, Zach Giacomelli decided to sell his 2021 BMW back to BMW Toronto, the same dealership he bought his used 2023 car from because it needed major repairs.
At first, the buyback process seemed easy. After making inquiries online, Giacomelli received a text message from Quinn at BMW Toronto, who was eager to help.
Quinn expressed sympathy for Giacomelli’s car troubles and asked about the car, which was still being repaired at the dealership. Later, during the same text message conversation, Mr. Quinn made a firm repurchase offer of $27,162.79.
Mr Giacomelli, 31, a funeral director, was satisfied with the offer as it was just enough to cover the outstanding balance on his car.
“I felt like this person, Quinn, was finally listening to me,” he said. “It felt so good.”
The good mood didn’t last. Giacomelli said he received a call from a BMW Toronto sales consultant shortly afterward asking him to rescind the offer, explaining that Quinn was not a real person and that an artificial intelligence chatbot had mistakenly made the offer.
“He said the offer was invalid,” Giacomelli recalled. “I was in shock. I felt like my jaw was on the floor.”
Zach Giacomelli said he was shocked when a Toronto dealership rescinded his offer to buy a 2021 BMW, explaining that the company’s chatbot had made a mistake. As Canadian companies rush to adopt AI tools, experts say they need to be aware of the legal risks.
Shock turned to anger when the dealer informed him that the actual purchase price was no more than $20,000. This was more than $7,000 less than what Quinn had promised.
“I was devastated,” Giacomelli said. “If you’re going to replace your employees’ jobs with AI, you need to respect what the AI has to say.”
Can AI conclude contracts on behalf of businesses?
As Canadian companies rush to deploy artificial intelligence tools, they face an increased risk of customer backlash and even legal action if the tools make mistakes.
Canadian law has already established that companies can be held liable if their AI chatbots divulge malicious information. For 2024Air Canada was forced to accept fare rebates after its chatbot gave passengers incorrect advice about bereavement fares.
The company argued in British Columbia’s Civil Resolution Tribunal that chatbots are “separate legal entities responsible for their actions.” But the court disagreed, saying the ultimate responsibility rested with Air Canada.
“Bots are employees in the same way that companies are liable when employees do something wrong,” said Tanya Walker, a litigation lawyer at Toronto’s Walker Law Firm.
“I don’t think companies really understand the magnitude and power that bots can have,” she says. “I can make a deal for you.”
Dealers will honor AI offers
Part of Giacomelli’s frustration stemmed from the fact that he didn’t know he was communicating with an AI. Quinn did not reveal his true identity, according to text exchanges reviewed by CBC News.
“I feel ashamed and angry that I have been negotiating with this bot,” Giacomelli said.
When Quinn first offered BMW $27,162.79, Giacomelli countered with $28,500 to see if he could get a better deal. Quinn seemed optimistic, texting that “the team” would consider it and that “$28,500 seems reasonable.”
Giacomelli had not yet accepted an offer when the dealer rescinded Quinn’s initial offer. Because he was waiting for a reply about the counteroffer.
Still, Walker said Giacomelli could still claim there was an agreement because near the end of the text exchange, Quinn set up a physical meeting at the dealership to finalize the deal. “Let’s lock in at 3:30 today,” the AI texted.
“He has every right to believe there was a binding contract,” Walker said.
After CBC News contacted BMW Toronto, BMW reinstated Quinn’s original offer of $27,162.79.
Giacomelli readily agreed to the offer, saying, “I felt very relieved.”
BMW Toronto sales manager Scott Shadbolt told CBC News in a phone interview that the dealership wants to see Giacomelli do the “right thing.”
Shadbolt said that due to a miscommunication from a human employee, Quinn misunderstood the amount Giacomelli owed on the car ($27,162.79) as the amount BMW would buy back the car.
“The AI bot acted accordingly and misinterpreted the message,” he said.
Walker said if companies aren’t ready to support AI, they shouldn’t let it mediate transactions.
“I think that’s an unfair business practice.”
Shadbolt said Quinn was never programmed to negotiate contracts alone, but only to communicate human-generated repurchase offers. From now on, only human employees will present such offers to customers, he said.
Shadbolt also said BMW Toronto is making changes to ensure customers know when they are interacting with AI.
“This is a bit of new territory for us,” he said. “We’re trying to figure out the best way to get a good result.” [AI] customer experience. ”
As the federal government’s new AI strategy favors more big data centres, a growing number of Canadians say they don’t want anything to do with them, including Manitoba Premier Wab Kinew, who just canceled plans to build one near Winnipeg. There is a growing backlash across America.
More challenges ahead?
Walker expects to see more of these types of disputes as companies use AI to enhance customer service.
According to Canadian statistical data Announcements compiled in Q2 2025 report that 12% of Canadian businesses are using AI to produce goods or provide services, up from 6% in the same period in 2024.
Of these companies, 25% used chatbots or virtual agents.
Legal obligations aside, companies have a corporate responsibility to do the right thing for their customers if their AI tools fail, said University of Guelph professor Gus Skoberg.
“Humans decided to introduce chatbots,” said Scholberg, co-director of the university’s Center for the Advancement of Responsible and Ethical Artificial Intelligence.
“But bots aren’t always rewarded, so you have to be willing to accept some of it when they make mistakes.”
