Chapter 15 Critical Legal Questions

Question 1

What legal theory governed consumer law from the 18th Century until the 20th Century?

Answer 1

Caveat Emptor

Question 2

What does caveat emptor mean?

Answer 2

“let the buyer beware”

Question 3

Is false advertising protected by the first amendment?

Answer 3

No.

Question 4

What are five elements of common law remedy for fraudulent advertising?

Answer 4

(1) a material misrepresentation
(2) of a presently existing fact
(3) intentionally or negligently made
(4) justifiably relied on
(5) to the plaintiff’s detriment

Question 5

What is sales puffery?

Answer 5

statements that can’t be considered fact

Question 6

What does FTCA stand for?

Answer 6

Federal Trade Commission Act

Question 7

What Federal law makes unfair competition and unfair or deceptive practices illegal?

Answer 7

the Federal Trade Commission Act

Question 8

What must a practice have in order to be unfair or illegal?

Answer 8

the capacity or tendency to deceive

Question 9

What doesn’t a practice have to have in order to be unfair or illegal?

Answer 9

there doesn’t need to be proof that it has deceived

Question 10

Give 6 examples of illegal advertising:

Answer 10

(1) bait-and-switch tactics
(2) low-balling tactics
(3) misleading price and savings claims
(4) untrue product test reports
(5) endorsements by fake doctor
(6) misleading tv or pictorial advertising

Question 11

Five FTC remedies:

Answer 11

(1) consent decree
(2) cease and desist order
(3) fines
(4) damages for person injured
(5) corrective advertising

Question 12

What does FDA stand for?

Answer 12

Food and Drug Administration

Question 13

What does the FDA do?

Answer 13

protects consumer from injury and fraud in the formulation, packaging, and advertisement of products

Question 14

What kind of products does the FDA cover?

Answer 14

foods, drugs, cosmetics, and therapeutic devices

Question 15

What started the FDA?

Answer 15

the Food and Drug Act

Question 16

When was the FDA started?

Answer 16

1906

Question 17

What was the FDA a reaction of? (what novel?)

Answer 17

Upton Sinclair’s THE JUNGLE

Question 18

What does the Equal Credit Opportunity Act forbid?

Answer 18

discrimination in the granting of credit based on race, sex, marital status, age, national origin

Question 19

What is a warranty?

Answer 19

contract offered by manufacturer, accepted by purchaser

Question 20

what does the Uniform Commercial Code, Article 2, govern

Answer 20

contracts for the sale of goods

Question 21

What are two types of warranties under the Commercial Code?

Answer 21

(1) express

(2) implied

Question 22

What code governs contracts for the sale of goods?

Answer 22

The Uniform Commercial Code, Article 2

Question 23

How is an express warranty created under the Uniform Commercial Code?

Answer 23

any promise or description of the goods in writing.

Question 24

When does an implied warranty take effect?

Answer 24

automatically right with the sale of the product.

Question 25

What are two implied warranties?

Answer 25

(1) implied warranty of merchantability | (2) implied warranty of fitness for a particular purpose

Question 26

What provides the authority to make "uniform laws on the subject of bankruptcies?"

Answer 26

the Constitution

Question 27

Who has the authority to make uniform laws regarding bankruptcies?

Answer 27

congress

Question 28

Name 3 chapters of bankruptcy:

Answer 28

(1) Chapter 7- straight bankruptcy (2) Chapter 11 (3) Chapter 13

Question 29

Filing chapter 11 bankruptcy means:

Answer 29

the business rides out temporary troubles and reschedules when the debts are owed.

Question 30

Filing chapter 13 bankruptcy means:

Answer 30

a person rides out temporary troubles and reschedules when the debts are owed.

Question 31

What are the four purposes of modern bankruptcy law?

Answer 31

(1) provide orderly method to get relief (consumers go through pre and post bankruptcy financial counseling (2) to provide uniform method of accounting for a debtor's assets (3) to protect honest debtors from having creditors take ALL assets (4) to protect the creditors from unseemly scramble for the assets of the bankrupt

Question 32

In regards to product liability, Strict Liability addresses what?

Answer 32

the fact that an injured person cannot claim any breach of contract if no contract was made.

Question 33

Can an injured person prove negligence when the "instrumentality" that caused the injury has been destroyed?

Answer 33

No.

Question 34

What is the second basis for product liability?

Answer 34

negligence.