Bus 303 - Business Law II - Chapter 15

The Federal Trade Commission's powers include the power to:

- conduct investigations; - investigate possible antitrust violations; - compel interstate businesses to file reports; - publish the results of the commission's investigations; - deal with disputes of FTC regulations; - deal with disputes of federal antitrust laws; - make recommendations to Congress concerning new legislation

To recover for negligence, the victim must prove:

- the manufacturer or seller owed a duty to the victim; - the manufacturer or seller violated that duty by not following the appropriate standard of care; - the victim suffered an injury because of that careless action; - the careless action was both the actual and proximate cause of the victims injury;

To recover under strict liability, one must prove:

- the manufacturer or seller sold the product in a defective condition; - the manufacturer or seller was engaged in the business of selling the product; - the product was unsafe to an unreasonable degree; - the defect was the proximate cause of injury or damage; - the defect existed at the time it left the hands of the manufacturer or seller; - the consumer sustained physical harm or proper damage by use of the product

Under product liability

a person harmed by a product's unsafe condition may recover damages from the manufacturer, the seller, or the supplier

A fraudulent misrepresentation is

a statement that is designed to mislead the buyer. It usually occurs when the seller misstates facts important to the consumer. These facts include those about the construction, durability, reliability, safety, strength, condition or life expectancy of a product. It is also deceptive to fail to disclose any fact that would cause the buyer to walk away from the contract

Unavoidably dangerous products may require

a warning to inform the consumer of possible harm. If the warning is adequate, consumers may be required to use the product at their own risk

The manufacturer's and seller's liability extends to

all persons who may be injured by the product. This includes: injured bystanders, guests, or others; they may also seek damages

A bait-and-switch scheme is

an alluring but insincere offer to sell a product or service that the advertise does not really intend to sell. Its purpose is to switch customers from buying the advertised merchandise to buying something else that is usually more expensive or advantageous to the advertiser

Negligence results when

an individual fails to exercise the degree of care that a reasonable person would have exercised under the same circumstances

The Cooling-Off Rule gives consumers

an opportunity to change their minds after signing contracts with people who come to their houses. Sales of goods or services over $25 made way from the seller's regular place of business may be canceled within three business days after the sale occurs. There are exceptions to this rule.

A consent order is

an order under which the company agrees to stop the disputed practice without necessarily admitting that it violated the law

Senders of unordered merchandise must

attach a statement to the package informing recipients of their right to keep and use the goods

Under strict liability, manufacturers have the duty to

design reasonably safe products. They must also give proper instructions for the product's use and provide warnings of possible danger

The federal Odometer Law prohibits people from

disconnecting, resetting, or altering the odometer of a motor vehicle in order to hide the vehicle's true mileage. Any one who sells or gives away a car must provide the new owner with a written statement disclosing the odometer reading at the time of transfer.

Fraudulent misrepresentations, sending unordered merchandise, bait-and-switch schemes, and odometer tampering are all

examples of unfair or deceptive practices prohibited by the FTC Act

Public policy seeks to

implement behavior that promotes the public consensus and eliminates behavior that does not. the making of safe products and demands that manufacturers, sellers, and distribut

Strict liability holds

manufacturers or suppliers liable for selling goods that are unsafe, without regard to fault or negligence. The principal consideration here is the safety of the product, not the conduct of the manufacturer or supplier

Punitive damages are

monetary penalties imposed as punishment for a wrongdoing. Injured parties in strict liability cases sometimes recover punitive damages

Product liability suits can be based on

negligence or strict liability

The doctrine of public policy states that

no one should be permitted to do anything that harms the public interest

A class-action lawsuit is

one that is brought by one or more plaintiffs on behalf of a class of persons. These are usually brought within one year after the violation

The Federal Trade Commission has the authority to

oversee and eliminate deceptive and unfair practices in commerce.

The Used Car Rule requires used car dealers to

place a Buyer's Guide sticker in the window of each car they offer for sale. The guide becomes part of the sales contract and overrides any contrary provision. A dealer is anyone who sells more than five used cars in a 12-month period.

The Consumer Product Safety Act covers

products or component parts, American-made or imported, that are manufactured or distributed for sale to a consumer for personal use, consumption, or enjoyment.

The Connsumer Product Safety Commission was established to

protect consumers from unreasonable risk or injury from hazardous products. They can order the recall of products, impose civil fines for violations, as well as, cease-and-desist orders

It is a violation of the postal law and the FTCA to

send merchandise through the mail to people who did not order it. It is also illegal to send letters requesting payment for unordered merchandise

A warning must

specify the risk and give reason for the warning. When the danger presented is obvious, no duty to warn exists because it will not reduce the likelihood of injury.

Public interest refers to

the idea that certain activities that affect the entire social structure must be regulated by the government

Public policy promotes

the making of safe products and demands that manufacturers, sellers, and distributors be held responsible for any injuries that result from their products

Under the cooling-off rule, a cancellation form must be sent

to the seller any time before midnight of the third business day after the contract was signed.

Consumer protection laws apply to

transactions between business people and consumers. As well as, businesses that sell real estate, goods, or services in interstate commerce or that somehow affect interstate commerce.

People who receive unordered merchandise through the mail may

treat it as a gift. They may keep or dispose of it in any manner they see fit.

The Federal Trade Commission Act declares

unfair or deceptive acts or practices in...or affecting commerce are unlawful. This act only governs interstate commerce.