Consumer Law

Introduction Caveat 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