Outline

CONSUMER PROTECTION LAW

1. COMMON LAW FRAUD

A. Product Liability Doctrines
i. Warranty (express and implied)
ii. Negligence
iii. Strict Liability
iv. Recission based on mistake
B. Fraud Claims
i. Punitive Damages
ii. Compensatory damages can be higher
iii. More likely to generate a settlement
C. Fraud Elements
i. False representation
ii. Scienter
iii. Made with intention that it would be acted on
iv. Justifiable reliance
v. Plaintiff doesn’t know
vi. Materiality
vii. Damages
viii. Example: Fischer v. Division West Chinchilla Ranch 310 F. Supp. 424 (D. Minn.
1970)
1. Seller predicted that chinchilla pelts would sell for $20-$40 and that
chinchilla ranchers without any previous experience could expect $5,000
annual profit after 5 years.
2. Seller liable because seller had greater knowledge and buyers were
inexperienced
D. Traditional Product Liability Theories
i. Deceit
ii. Express Warranty 2-313
iii. Implied Warranty of Fitness for Particular Purpose 2-315
1. Where the seller at the time of contracting has reason to know any
particular purpose for which the goods are required and that the buyer is
relying on the seller’s skill or judgment to select or furnish suitable goods,
 there is unless excluded or modified . . . an implied warranty that the
goods shall be fit for such purpose.
iv. Implied Warranty of Merchantability 2-314
v. Recission Based on Mistake

2. STATUTORY CONTROLS ON DISCLOSURE OF INFORMATION

A. FTC Act

i. Capacity or tendency to deceive

ii. Common Law Fraud & Deceit vs. FTC Traditional Standard & Deception

iii. FTC Procedure

1. Negotiate
2. Complaint Counsel then files complaint
3. ALJ tries the case
4. ALJ makes finding of fact and draws conclusions of law
5. The loser can appeal to the Commission
6. If complain counsel wins, the Commission issues a cease and desist order or on a
rare occasions calls for corrective advertising
7. The company can appeal to the court of appeals
B. Lanham Act

C. “Little FTC Acts”

i. (for the “Little FTC Act” problems, use GBL § 349 and the following materials
beginning at page 1234 in the SCS.
D. Disclosure Laws,

E. Credit Costs
F. Truth in Lending Act

G. Consumer Leases

H. Student Loans

I. Other Disclosure Laws

3. STATUTORY CONTROLS ON INFORMATION

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 A. Truth in Lending Act

B. Consumer Leases

C. Student Loans
D. Other Disclosure Laws

i. Collection Issues in Student Loans

4. ARBITRATION: 

5. ABUSES AT THE FORMATION OF CONTRACT

A. Bait and Switch
B. Cooling Off Periods

6. CREDIT REPORTING

7. COLLECTION PRACTICES

8. PRIVACY
A. Foundation
B. Telemarketing
C. Online Privacy

9. CREDIT DISCRIMINATION