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CHAPTER 14 Consumer Protection How are you protected?

CHAPTER 14 Consumer Protection How are you protected?. 14-1 Protection through Governmental Action 14-2 Protection through Action by the Consumer. 14-1 Protection through Governmental Action. GOALS Explain the need for governmental involvement in the marketplace

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CHAPTER 14 Consumer Protection How are you protected?

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  1. CHAPTER 14Consumer Protection How are you protected? 14-1 Protection through Governmental Action 14-2 Protection through Action by the Consumer

  2. 14-1 Protection through Governmental Action GOALS • Explain the need for governmental involvement in the marketplace • Constitution says gov’t is created to protect the people • Identify protections against substandard goods • Recognize unfair trade practices Chapter 14

  3. FOCUS • Who is a consumer? • A person who acquires goods for personal or household use. Chapter 14

  4. GOVERNMENTAL PROTECTION IN TODAY’S MARKETPLACE • Consumer caveats – “Caveat emptor” • Let the Buyer Beware – consumers are thought to be smart enough to judge a product’s safety • “Caveat Venditor” = now let the seller beware. • Class actions-one case represents many in a lawsuit against vendorsl ex. tobacco • Governmental procedure • Cease and desist order • Consent order • restitution Chapter 14

  5. Define the terms caveat emptor and caveat venditor. Chapter 14

  6. PROTECTION AGAINST INFERIOR SERVICES AND GOODS • Licensing • Consumer Product Safety Commission • Unsafe products- FDA or food and drug administration regulates • Adulterated food, drugs, and cosmetics • Improper weights and measures Chapter 14

  7. What commission sets safety standards for most consumer products? Chapter 14

  8. SIX FORMS OF UNFAIR TRADE PRACTICES AGAINST THE PEOPLE • Agreements to control or fix prices • False and misleading advertising- • Bait and switch- only have a few of advertised product. • Illegal lotteries and confidence games • Unfair pricing and service • Mislabeled goods • Other unfair trade practices Chapter 14

  9. List at least six forms of unfair trade practices. Chapter 14

  10. 14-2 Protection through Action by the Consumer GOALS • Describe the protection afforded consumers by the law of product liability • Identify the various warranties that may apply to a sales transaction Chapter 14

  11. FOCUS • What legal action can the individual consumer take to protect herself or himself? Chapter 14

  12. WHAT IS PRODUCT LIABILITY? • Expansion of product liability • Privity of contract – is the relationship between the buyer and seller. Years ago buyer could only sue the retailer. Today the buyer and his family can sue everyone up to the manufacturer. • Recovering damages Chapter 14

  13. Under what product liability approach is a person injured by a defective product most likely to recover damages? Chapter 14

  14. HOW IMPORTANT ARE WARRANTIES? • Requirements of express warranties-obligates the seller to repair or to replace a defective product without cost to the buyer and within a reasonable time. Anything less than that is a limited warranty. • Opinions v. warranties- “superb quality” best on market is an opinion, not backed by facts. This is also called “puffing”. • Express warranties made by all sellers- bound by the facts they utter • Implied warranties given by all sellers- implicit warranty on sellers imposed by law. There are 3 types: • Warranty of title • Warranty against encumbrances-claims of 3rd parties, liens • Warranty of fitness for a particular purpose Chapter 14

  15. HOW IMPORTANT ARE WARRANTIES? (continued) • Implied warranties given only by merchants • Warranty against infringement- delivered free of claims • Warranty of merchantability-goods must be fit for the ordinary purpose for which they are used. • Exclusion of warranties – usually if defective, example of used cars • Lemon laws Chapter 14

  16. Distinguish express and implied warranties. Chapter 14

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