Consumer Law

IntroductionCaveat emptor

• Consumer-Person who buys goods and services from a seller– Right to be correctly informed of quality, price and

credit terms

Contracts

• An agreement between two or more persons to exchange something of value– Legally binds to do what is said– Breached-fails to follow through

• Restaurants, movies

Elements

• Offer and an acceptance• Must be directed at someone specific• Exchange of Consideration• Something of value is given for something else

of value• Person must be legally competent • Can not be something illegal

Minors and Contracts

• Minors can’t be forced to carry out contracts• Must have a cosigner– Adult who is responsible for making payments if

the minor does not honor the deal

• **Necessities such as food, clothing, shelter or medical aide-reasonable value

• Once 18 the contract is ratified-to confirm even though it was not approved before

Written and Oral Contracts

• Can be written or oral but some must be written to be enforceable

• Sale of land, real estate, sale of goods priced more then 500 dollars, another's debt, services performed with one year from date of agreement

• **always better to have a written contract

Illegal Contracts

• Some contracts unenforceable• ***Sale of illegal drugs– Unconscionable-unfair, harsh or oppressive that it

should not be enforced– Consumer is presented with contact on take it or

leave it basis– Uneven bargaining power between parties

***Power company

Fraud

• False statement about an important fact that is made to persuade a person to agree

• **baseball card

Warranties

• Promise or guarantee made by a seller about the quality or performance of goods for sale

• May also have statement about what will be done to remedy the problem– How long does it last– What parts or problems are covered or excluded– Remedy

Express Warranty

• Statement that is written, oral or demonstrated concerning quality of goods

• As seen on TV, salesman • Puffing-sales talk

Magnuson-Moss Warranty Act

• Requires written warranties• Disclose all essential terms and conditions in a

single document• Be stated in simple language• Available to the consumer before a sale• **does not apply to items $ 15 dollars or less

Full Warranty vs. Limited

• Full Warranty– Defective product will be fixed/replaced at not cost– Consumer will not have to do anything unreasonable-ship

piano to a factory– Product will be fixed within a reasonable time– If product can’t be fixed after a number of reasonable

attempts-refund or replacement– Warranty applies to anyone who owns the product during

warranty period

• Limited Warranty– Any protection less than-covers some defects or problems

Implied warranty

• Unwritten promise crated by law that a product will do what it is supposed to do.

• Products must meet certain criteria, standards of quality and performance

• Only sold by bona fide/authentic dealers– Warranty of merchantability– Warranty of fitness for a particular purpose– Warranty of title

Different types of warranty

• Warrant of merchantability– Unwritten promise that the item sold is of at least average

quality– **radio must play, saw must cut– **As is, final sale

• Warranty of fitness for a particular purpose– Consumer tells a a seller b3efore buying an item is needed

for a specific purpose– **water proof watch

• Warranty of title– Sellers promise that he/she owns the item being sold

Strict Liability

• Recovering damages based on negligence of manufacturer or seller

Disclaimers

• Attempt to limit sellers responsibilities should anything go wrong

• Disclaim implied warranty “As is” • Disclaimer must be placed to be easily seen• Written warranty=no disclaimer to imlied

warranty during effective period

Credit and other Financial Services

• Three ways to pay for goods• Cash• Credit• Bank accounts

Bank Accounts

• Checking• Maintaining accurate records

• Overdraft protection • Savings• **to provide updates to accounts• Electronic Fund transfer act– Withdrawals of the wrong amount– Unauthorized withdrawals

Banking Fees

• Standard charges• Ordering checks• Writing too many checks• Failing to keep a minimum balances• Bouncing checks• Small fee by bank to use ATMs that is not

theirs

Debit cards and Lost stolen cards

• credit cards and debit cards be used where the other is accepted

• If lost check book– Stop Payment of checks

**can charge a fee to stop payment on one check but not on checks if lost or stolen

**Liability is limited to 50 dollars no matter when you discover on credit cards

Lost cards continued

• If your debit card is lost– Liability depends on how quickly you notify the

bank– Within two business days no more than $50– If you discover unauthorized use notify bank

within 60 days and your liability is limited to $500– If you fail to notify within 60 days your potential

loss is unlimited

Credit