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1) What factors determine whether a seller’s or lessor’s statement constitutes an express warranty or mere “puffing”? Under the UCC, express warranties arise when a seller or lessor indicates any of the following: an affirmation or promise of fact, a description of the goods, or a sample shown as conforming to the contract of goods. Express warranties are created with only statements of fact, whereas statements that relates to the supposed value or worth of the goods, or statements of opinion or recommendations of the goods are considered “puffery” and no warranty is created. ) What implied warranties arise under the UCC? Under the UCC, implied warranties include the implied warranty of merchantability (which automatically arises in every sale or lease of goods made by a merchant who deals in good of the kind sold or leased), and the implied warranty of fitness for a particular purpose (which arises when any seller or lessor, regardless of merchant or non-merchant, knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the seller’s or lessor’s skills and judgment to select suitable goods.
Implied warranties can also arise (or be excluded or modified) as a result of course of dealing or usage of trade. 3) Can a manufacturer be held liable to any person who suffers an injury proximately caused by the manufacturer’s negligently made product? Yes, those who make, sell or lease goods can be held liable for physical harm or property damage caused by those goods to a consumer, user or bystander, which is called product liability.
If a manufacturer fails to exercise “due care” to make a product safe, or acted negligently in the manufacture of the product, the person who is injured by the product may sue the manufacture for negligence. Further, a product liability action based on negligence does not require privity of contract, meaning the person who was injured by a product need not be the one who purchased it. A manufacturer is liable for its failure to exercise “due care” to any person who sustains an injury proximately caused by a negligently made (defective) product. ) What defenses to liability can be raised in a product liability lawsuit? There are several defenses that can be asserted in product liability suits. First is the assumption of risk, where the user or consumer knew of the risk of harm and voluntarily assumed it. There is also product misuse, in which the user or consumer misused the product in a way unforeseeable by the manufacturer. Next, liability may be distributed between the plaintiff and the defendant under the doctrine of comparative negligence (fault) if the plaintiff’s misuse of the product contributed to the risk of injury.
Further, if a defendant can establish that a plaintiff’s injury resulted from a commonly known danger, the defendant will not be liable. Defendants may also not be held liable if they establish that plaintiff has no basis for claim, plaintiff has not met the requirements for an action in negligence, plaintiff failed to meet one of the requirements for a strict liability action, and the goods have been subsequently altered by plaintiff. 5) What are the major federal statues providing for consumer protection?
The major federal consumer protection laws include legislation governing deceptive advertising, telemarketing and electronic advertising, labeling and packaging, sales, health protection, product safety, and credit protection. Examples of these federal statutes are: a) Advertising ??? The Federal Trade Commissions Act of 1914 created the FTC to carry out the goal of preventing unfair and deceptive trade practices, including deceptive advertising. ) Labeling and Packaging ??? The Fair Packaging and Labeling Act of 1966 requires that food product labels identify (1) the product; (2) the net quantity of the contents and the size of the serving if the number of servings size is stated; (3) the manufacturer; and (4) the packager or distributor c) Sales ??? The FTC Mail-Order Rule of 1975 and as amended by the FTC Mail or Telephone Order Merchandise Rule of 1993 provide specific protections for consumers who purchase goods over the phone or through mails, including (among other things) requiring mail-order merchants to ship orders within the time promised in their catalogues or advertisements, to notify consumers when orders cannot be shipped on time, and to issue a refund within a specified period of time when a consumer cancels an order. d) Food and Drugs ??? The Federal Food, Drug and Cosmetic Act of 1938, protects consumers against adulterated and misbranded foods and drugs, and establishes food standards, specifies safety levels of potentially hazardous food additives and sets classifications of food and food advertising. e) Product Safety ??? The Consumer Product Safety Act of 1972 seeks to protect consumers from risk of injury from hazardous products. ) Credit Protection ??? The Consumer Credit Protection Act of 1968 is a disclosure law that requires sellers and lenders to disclose credit terms or loan terms in certain transactions, as well as provide for equal credit opportunity, credit-card protection and protection to consumers who lease automobiles and other goods equal to or lesser than $25,000. 2) Questions and Case Problems (pp 412-414) — Questions 13-5 and 13-8. Question 13-5 I feel that what Easton (as the president and a representative of Source One) did was a willful violation of FCRA. According to the FCRA, consumer credit reporting agencies may issue credit reports to users only for specified purposes, including the extensions of credit, the issuance of insurance policies, compliance with a court order and compliance with a consumer’s request for a copy of her or his own credit report. Easton obtained financial information on targeted consumers which were not used for any of the previously-mentioned purposes.
Also, when Easton called the financial institutions to learn of the targeted consumer’s account balances by deceptively impersonating individuals other than himself, the targeted consumers were not notified of that fact and Easton obtained the financial information without the consumer’s consent. The information obtained by Easton was outside the scope of the credit reporting agency’s report, and the targeted consumers were not given the opportunity to verify or dispute its accuracy. Easton and the company were not acting in a confidential and responsible manner, considering their actions of inappropriately obtaining financial information without the consent of the consumer and then selling off this financial information for a fee without knowing what it’ll be used for.
They were not acting in the interest of the consumer, but only in their own, and did not attempt to try to protect the consumer’s privacy, and therefore their actions are considered a willful violation of the FCRA. Question 13-8 The filing of a suit is not considered “communication”. The amendment to the Fair Debt Collection Practices Act in 2006 exempts legal pleadings from the definition of initial communication. Before any filing of a suit, the creditor should have administered an “initial communication” in which the debtor is informed of (among other things) the amount of debt, the name and address of the creditor, and gives the debtor an opportunity to dispute the validity of the debt, or any portion thereof, within a 30-day time frame. The first communication to a debtor regarding an outstanding debt should not be a legal suit filing.