Consumer Protection Law

Unit Essential Question

• How does consumer protection legislation affect businesses?

• Bell Ringer: Hot Debate pg 258

• Consumer Protection Law Ch 15 pg 269

• The Consumer Protection Act Handout and case studies

• Study Guide

5 Step Protocol:

BCS-LEB-6: The student identifies consumer protection legislation and its

affects on business.

1. Define Vocabulary Identifies- recognize

Consumer- buyer Protection- guard against

2. Study the Standard (Guiding Questions)

What rubrics will be used?

What would be evidence of growth? What work would we use to verify understanding?

3. Identifying Strong and Weak Work Weak Work

No input Student attention

Not completing your work Work did not relate to standard

Strong Work Reflection

Cooperation Participate

Respect goal

4. Scaffold Understanding of the Standard

BCS-LEB-6: The student identifies (recognizes) consumer (buyers) protection (rights through) legislation and its affects on business.

1.

2. Scaffold Understanding of the Standard

BCS-LEB-6: The student identifies (recognizes) consumer (buyers) protection

(rights through) legislation and its affects on business.

3. Develop “I/We can….”Statements

I can apply what was learned in the classroom to know my consumer rights. Buyer beware.

Uniform Commercial Code

The UCC is a large set of business statutes which simplified, clarified, and modernized

many laws relating to commercial transactions.

UCC

• Under the UCC a buyer can accept goods in 3 ways

1. After a reasonable opportunity to inspect the goods, the buyer signifies to the seller that the goods conform to the contract or will be retained in spite of their nonconformity.

2. The buyer acts inconsistently with the seller’s ownership (for example, uses, consumer, or resells the goods).

3. They buyer fails to make an effective rejection after having a reasonable opportunity to inspect the goods.

TOTD

• 321• 3 forms of unfair trade

practices• 2 Define the terms

caveat emptor and caveat venditor.

• 1 What commission sets safety standards for most consumer products?

• Vocabulary used today

• UCC• FTC• Bait and switch• Unfair pricing• Caveat emptor• Caveat venditor

Protection through Action by Consumer

• Lesson Essential Question: What is the UCC and What is its purpose?

• Bell Ringer: What’s Your Verdict? Pg 266• Continue Ch 15 lecture/notes 15.2 pg 266-272• Deceptive Advertising: Crossing the Line

– Desk Tools– C-lab– C317– Legal Environment of Business– Consumer Protection– EconEd Deceptive Advertising

Warranties

• An assurance that the seller makes about the product’s qualities or performance.

• Because they involve sales of goods , warranties are governed by the UCC.

• Product liability means affixing of responsibility to compensate buyers, users, and even those standing nearby for injuries caused by a defective product.

Privities of Contract

• The relationship that exists between or among the contracting parties as a result of their legally binding agreement.

• At common law, warranty liability depended on the contract between the buyer and seller, who were said to be in privities of contract.

• The UCC broadened the common law rule so that all injured persons who are the buyer’s family, household, or guests may sue.

Recovering Damages

• A product liability suit may be based on a breach of warranty or on the torts of fraud, negligence or strict liability.

• The injured consumer may still have difficulty recovering damages.

• A person injured by a defective product is most likely to recover damages by relying on strict liability.

• There is no liability if the injury was a result of an unintended use of the product.

Types of Warranties (Express)

• Express Warranties-assurance of performance or quality expressly made by the seller

• Under the Magnuson-Moss Warranty Act, the Federal Trade Commission has established certain minimum standards that must be met by sellers who give written warranties on consumer products that cost more than $15 and that normally are used for personal, family, or household purposes.

Express Warranties

• Warranties must be made available to consumers prior to the sale of the item

• These warranties must include:– To whom the warranty is extended– Description of the product and any exclusions– What the warrantor will and will not do in the event of a breach of

warranty– When the warranty begins and ends– Procedure to obtain performance of warranty obligations– Availability of informal methods of settling disputes– Limitation on how long implied warranties last– Exclusions or limitations on incidental consequences– “This warranty gives you specific legal rights, and you may also

have other rights which vary from state to state.”

Express Warranties

• An express warranty that obligates the seller to repair or to replace a defective product without cost to the buyer within a reasonable time is a full warranty.

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

Types of Warranties (Implied)

• While issuance of express warranties are at the discursion of the seller, law compels all sellers to honor certain implicit, or non stated warranties, in order to ensure minimal standards of contractual performance.

• This is an implied warranty.

Implied Warranties

• Warranty of title-the seller warrants that he or she has the title to the goods and the right to transfer them

• Warranty against encumbrances-the seller’s warranty that the goods shall be delivered free of all claims of third parties of which the buyer is not aware at the time of contracting.

• Warranty of Fitness for a Particular Purpose-the seller’s warranty that the goods are reasonably fit for the purpose for which they are being sold.

Implied Warranties

• Warranty Against Infringement-a merchant makes an implied warranty that the goods in which she or he normally deals shall be delivered to a buyer free of any third party’s claims for patent, copyright, or trademark infringement.

• Warrant of Merchantability-requires that the goods be fit for the ordinary purposes for which such goods are used.

Exclusion of Warranties

• Some goods may be sold without any warranty.

• To do so, the seller must refrain from making any express warranties, and use appropriate language that will exclude implied warranties.

• A disclaimer is a notice of exclusion.

Lemon Laws

• Warranties are augmented by consumer self-help laws called Lemon Laws.

• These laws protect consumers of vehicles mainly, but may extend to other consumer products in certain jurisdictions.

• These laws apply to products purchased this defects that after reasonably attempted, cannot be repaired.

TOTD

• Answer LEQ• What is the UCC and

What is its purpose?• Go over study guide

• Vocabulary words used today

• Implied warranties• Warranties• Express warranties• Disclaimer

Deceptive Advertising

• Desk tools• C-Lab• C317• Legal Environment of

Business• Consumer Protection

Law• EconEdLink

Deceptive Advertising

• 12 cases involving charges of deception in advertising.

Deceptive Advertising Directions

• Work in teams of 2 research one of the 12 cases, using web links provided as a starting point. A general search of the Internet using the term “deceptive advertising” and a search engine such as Google or Yahoo may lead you to more links.

• Using the information that is gathered, create a short PowerPoint about the chosen case.

• Using the information they gather, they are to fill in the block on their worksheet that corresponds with their case.

Share Cases• Teams will pull up their PowerPoint. One

student from each team should remain seated at the desk to share information with classmates while the other team members move around to the other stations to collect information.

• When a team member has finished collecting data on his/her assigned cases, she/he should switch with their teammate. And the process starts over.

LEQ: How are businesses liable for products sold to consumers?• Bell Ringer: Case for Legal Thinking pg

277

• Finish research on case where ads have crossed the line

• Start creating PowerPoint

TOTD

• Answer LEQ• How are businesses

liable for products sold to consumers?

• Vocabulary words used today

• Arguments• Supreme Court• Defective• product

LEQ: How important are warranties?

• Bell Ringer: What’s Your Verdict? Pg 268

• Share their case findings with their classmates.

• TOTD: Answer Essential Question

• How does consumer protection legislation affect businesses?

• Desktools

• C-lab

• Examview

• Login

• Click OK / No test available

• Click on Folder

• Test (already highlighted)

• Legal Environment of Business

• Hit the Select Button

• Consumer Protection Law

• Password: