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Elon Musk Refuses Super Rude Customer a Car

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By Ephrat Livni, Esq. on February 03, 2016 2:58 PM

A scandal is brewing on the social networks and it raises an interesting legal question. The carmaker Tesla, brainchild of Elon Musk, is refusing to sell venture capitalist Stewart Alsop a car, claiming he was super rude.

Can he do that? Before we address the question, let's look at what happened here, according to Auto Guide.

Woes of the Rich

Last September, venture capitalist Stewart Alsop wrote an angry post on Medium directed at Elon Musk, complaining about a Tesla Model X unveiling event that started late, was boring, and did not seem designed to impress customers, all of whom had already paid $5,000 for the new Model X, sight unseen.

Alsop was so disappointed with the event that he asked, "Should I wonder if there are other problems in managing Tesla as a company? Is this a marketing failure or do you treat your customers like this after they get their car?"

Apparently, Musk and Alsop then had a phone conversation. Musk found Alsop to be "super rude" and canceled his order.

Musk Tweets Position

Musk is followed by millions on Twitter but is himself only interested in the opinions of 50, and Alsop is not one of them. Today Musk addressed his tweeple via tweet, saying that Alsop's order was canceled after he was "super rude." He mused that it must be a slow news day, since the refusal of service drew so much attention.

Can Musk Do This?

Can Elon Musk or any other business owner just deny service to someone who can and will pay for a product? The answer is that it depends on the reason for the denial of service. Businesses cannot discriminate against customers for certain reasons, but they can be discriminating.

Let's look at the distinction. You cannot discriminate against customers on the basis of race, religion, gender, or sexual orientation, according to federal law (there are variations in state law). But you can refuse service when you have a legitimate business reason to do so.

Musk claims Alsop was super rude, which is amusing considering that this was Alsop's complaint about the Tesla chief. Now Musk is refusing to sell Alsop a Model X, and hardly anyone seems upset about it.

Fresh comments responding to the refusal are up below Alsop's original post on Medium complaining about the Model X. Judging from these, it sounds like many find this spat over politesse by two mega-rich men amusing at best.

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