Consumer Protection

1
Consumer Protection
CHAPTER 17

• 17-1 Federal Protection
• 17-2 State and Local Protection and Product
  Liability
• 17-3 Warranties

2
Federal Protection
LESSON 17-1

• Explain why and how the law focuses on the
  protection of consumers
• Discuss the trade practices that are prohibited
  by consumer law

3
WHY DOES THE LAW PROTECT CONSUMERS?

• The complexity and sheer abundance of products
  make it difficult for the consumer to properly
  judge the quality of advantages and disadvantages
  of a product.

4
PROTECTION AGAINST SUBSTANDARD GOODS

• Safety standards
• Drugs, food, and cosmetics
• Standards for weights and measures

5
UNFAIR TRADE PRACTICES

• Agreements to control or fix prices
• False and misleading advertising
• Illegal lotteries and confidence games
• Unfair pricing and service
• Mislabeled goods
• Used articles sold as new
• Confusing brand name or trademark
• Unordered merchandise and commercial bribery
• Fraudulent telemarketing and Internet schemes

6
FTC GUIDELINES

• The FTC has adopted many guidelines and
  regulations that are intended to correct abusive
  trade practices by requiring businesses to act
  certain ways.

7
State and Local Protection and Product Liability
LESSON 17-2

• Discuss the contribution of local and state
  governments to consumer protection
• Define product liability
• Explain how strict liability law can protect
  consumers injured by defective products

8
STATE AND LOCAL GOVERNMENT PROTECTION

• Licensing laws
• Remedies available to injured consumers
• Sanitation and food adulteration laws
• Safety laws

9
WHAT ISPRODUCT LIABILITY?

• Privity of contract
• Recovering damages

10
Warranties
LESSON 17-3

• Distinguish between implied and express
  warranties and explain the protection they
  provide
• Explain the warranty of merchantability and how
  it may be limited or excluded
• Differentiate between a full and a limited
  warranty

11
EXPRESS ANDIMPLIED WARRANTIES

• In sales, a warranty is a statement about the
  products qualities or performance that the
  seller assures the buyer is true.
• An assurance of quality or promise of performance
  explicitly made by the seller is an express
  warranty.
• Warranty obligation implicitly imposed by law on
  all sellers is an implied warranty.

12
SELLERS CLAIMS

• A positive statement about the value of goods or
  a statement that is just the sellers opinion
  does not create a warranty.

13
IMPLIED WARRANTIES

• Warranty of title
• Warranty against encumbrances
• Warranty of fitness for a particular purpose

14
ADDITIONAL INFORMATION ABOUT WARRANTIES

• Warranties implied by law for merchants
• Warranty against infringement
• Warranty of merchantability
• Express warranties made by all sellers
• Warranty of conformity to sellers statement or
  promise
• Warranty of conformity to description, sample, or
  model
• Exclusion of warranties