Personal Law: Chapter 15

Disclaimer

A repudiation or renunciation of a right or power typically or legally vested in a person. To exclude or modify any implied warranty of fitness, the disclaimer must be in writing and be easily noticed.

Bait and Switch

A store practices another form of improper advertising when it uses an under stocked, abnormally low-priced "come on" to lure prospective buyers into the store. Buyers find that the advertised item has been sold out and the customers are then redirected to a product with a greater profit margin.

Encumbrances

Also implicit in the act of selling is the seller's warranty that the goods shall be delivered free of all encumbrances (claims by third parties enforceable against the goods) of which the buyer is not aware at the time of contracting. Th is warranty does not ensure that the goods are free of encumbrances at the time of the sale, but rather that they will be free at the time of delivery.

Restitution

An agency also may fine a violator and/or order restitution, which permits a party to a contract to recover money or property (or the value there of) given to the other party.

Express Warranty

An explicitly made assurance of quality, description, or performance included in the written or oral terms of the sales agreement by the seller.

Full Warranty

An express warranty that obligates the seller to repair or to replace a defective product without cost to the buyer and within a reasonable time after given notice of the problem.

Consumer

An individual who acquires goods that are intended primarily for personal, family, or household use.

Cease-and-Desist Order

An order requiring the company to stop the specified conduct. If the defendant violates the order, heavy civil penalties may be imposed.

Unfair Method of Competition

Any method of doing business that is characterized by bad faith, deception, fraud or a tendency to inhibit competition or monopolize.

Limited Warranty

Any warranty that provides less protection than a full warranty, and the seller must identify it as such.

Privity of Contract

At common law, warranty liability depended on the contract between the buyer and seller, who were said to be in privity of contract. Privity of contract is the relationship that exists between or among contracting parties.

Warranty of Merchantability

Every merchant who customarily deals in goods of a particular kind makes an implied warranty of merchantability to all buyers of the goods. Basically, a warranty of merchantability is an assurance that the goods are fit for the ordinary purposes for which such goods are used.

Product Liability

Is a legal obligation stemming from the affixing of responsibility to compensate buyers, users, and even those standing nearby for injuries caused by a defective product. A product liability suit may be based on the torts of fraud, negligence, or strict liability. Recall that strict liability is liability that exists even though the defendant was not negligent. A product liability suit also may be based on a breach of warranty .

Consent Order

Is a voluntary, court-enforceable agreement to stop an illegal or questionable practice.

Warranty

Is an assurance given by one party to an agreement to the other of a fact upon which the latter may rely.

Puffing

Making statements such as "superb quality," or "best on the market," is exaggerated sales talk called puffing. Such words are not warranties or statements of fact. They are merely personal opinions. Buyers should not—and generally do not—accept such opinions at face value.

Caveat Emptor

Means "let the buyer beware." Consumers were thought to be adequately protected by their own ability to judge a product's safety and utility.

Caveat Venditor

Means "let the seller beware."

Implied Warranty

Sellers are free to decide whether to give any express warranties. However, the law compels all sellers to honor certain implicit, or unstated, warranties, in order to ensure minimal standards of contractual performance. This rule applies whether or not explicit warranties are given by the seller. An implicit warranty obligation imposed by law on all sellers is called an implied warranty .

Class Actions

The law also recognizes that if the product in question costs little or the potential damage claims are low, court action by a consumer often is not worth the effort and expense. To help overcome this problem, class actions have been authorized by court rules.