Interesting WSJ article"UAL Corp.'s United Airlines, Continental Airlines Inc., Southwest Airlines Co., JetBlue Airways Corp. and Singapore Airlines all say their policy is to not cancel tickets even when a mistake is discovered, no matter how large the error."
It also says:
In New York, for example, if the purchaser "either knew or should have known such a mistake was being made," the seller can cancel a contract.
If I recall correctly from my Business Law classes, when there is an error in a contract that is obvious to the buyer (such as this) that it's a mistake, it's a unilateral error and is voidable.
If I send you a contract for work that normally costs $5,000, and my secretary forgets some zero's and types $50 in the contract, I can void the contract because it was a mistake and the other party obviously knew that it was a mistake and would be taking advantage of me by requiring me to honor the contract. If however, my mistake was less outrageous and she wrote $4,500 due to a misunderstanding, the other party signed it in good faith expecting it to be valid and the contract would be upheld.
I believe therefore that it's obvious from a legal standpoint that they can cancel the tickets and aren't bound contractually to honor them. The only question is if they will make an internal decision to honor it to promote goodwill and show that they have good customer service (and avoid bad publicity).