BUSINESS LAW

QUESTION ONE

            According to the Lanhaman act, ‘Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities attracts a legal action.’[1] Basing Michael’s argument on this act, the plaintiff, has various reasons to base his case. First, he is in a position to prove that the advertisement of the commercial activity was false, as it potential deceived him. Secondly, the goods involved interstate commerce and therefore, affected his purchasing decision. Finally, the deception of the advertisement injured his reputation. As a matter of fact, the injury is attributed to the amount of money lost, through expenses he incurred while trying to rush to the competition. Mr. Michael can go on to argue that his money will not have been lost if the advertisement could not have made.[2]

There are legislations about false advertisements are very specific and the plaintiff should be aware of them. Generally, they are more of consumer protection at the state level than under the common law. Besides the fact that the advertisement was false on its face, the manufacturer failed to disclose very important information which the consumer was entitled to know. Under the Lanham’s act, the representation was ‘untrue as a result of the failure to disclose a material fact.’[3] Going by this assortment, the advertisement was and partly corrects statement which were misleading, as they did not bring out what the customer wanted to know.

 

In this case, the court should use its discretion to determine that the disclosure of information was insufficient hence; the manufacturer was advertising its product by making a number of astounding claims on the performance of the car and value for the money as compared to its competitors. This claim sounds good to the ear and any potential client can ran to it without giving it a second thought therefore, the plaintiff should be justified to argue that he was confused on the state of the product therefore, a mistake was made. This should make the manufacturer to be liable in a civil action taken by the plaintiff and be able to collect damages. Mr. Michael has evidences which indicate that he was actually deceived and that the manufacturing company used the advertisement in bad faith[4]

 

On the same ground, the plaintiff should be aware that there are laws which protect consumers from such deceptive trade practices. This includes practices of showing products with an intention of not actually selling them as advertised. In Michael’s case, the advertisement was not real and was only meant to attract people to the show room. As a result of this, it affected his choice of the product. It is worth noting that it is an offence for a manufacturer to advertise a product that is likely to cause damage, injury or loss to the public. Again, even though everything that was stated in the advertisement may have been literally true, the advertisement should be considered as misleading because the impression it created was false.[5]

 

The plaintiff should go a head and argue that the manufacturer omitted or hide important material information. Consequently, what the advertisement provided was unintelligible, unclear, and unclear and was done in untimely manner. The manufacturer failed to make the commercial intent clear to the public and as a result, the plaintiff made un- informed decision. However, the manufacturer may argue that there was limitation of time or space in the media. In such circumstances, he should have taken other relevant steps to convey the message (such as stating “terms and conditions apply”).the plaintiff may also argue that he made haste decisions because the advertisement falsely stated that the competition was only available for a very short time. Again, the advertisement claimed to offer a prize promotion, but it never awarded the prizes described or gave a reasonable equivalent. As a consumer, the plaintiff stands a chance to be protected from these criminal misrepresentations. As a matter of fact, the plaintiff has a right to be given facts needed to make informed decisions hence, should be protected from these misleading advertisements[6]

By staging a competition that was not real, the misleading advertisement caused damage to the plaintiff and this includes the financial losses. In his argument, he should not be made to bear this unnecessary costs hence, should participate in the lawsuit to get compensation for the losses incurred. On the same note, the plaintiff should argue that he was just but a victim of bait for the company to get what it wanted. Under the Federal Trade Commission Act switch, this kind of advertisement should be considered illegal. It is illegal to promote a product that the company doest not intend to sell under given conditions. As par the federal and state consumer protection laws, a penalty should be imposed to companies that run misleading ads. In this case, the company should either be ordered to stop engaging in deceptive practices, urged to give corrective advertising, or be fined accordingly. In this event, the misleading advertisement caused injury to the consumer; therefore civil penalties should be imposed to recover the monetary damages. Well, going by the Lanham act, “a consumer bringing a lawsuit against a company must prove that the advertisement was actually false or likely to mislead or confuse consumers”. This is a requirement for one to obtain recovery damages but, in Michael’s case, he has all the evidence required. This includes the passing of inaccurate information that meant to persuade him to buy on less favorable conditions than the actual market terms[7]

In general terms, the commercial practice was unfair and contrary to professional diligence requirements and was likely to distort materially the economic behavior of the plaintiff. The misleading omissions caused him harassment and in the court of law, there are provisions for such actions. In this case, the subject of protection from such multipartite is the consumer, who is Mr. Michael. In this case the plaintiff should seek for interim measures that will immediately terminate the unfair practices. Upon satisfying the necessary requirements, he should be sure that injunctive relief will be granted by the courts. This is demonstrated in the Lanhaman act, ‘likelihood of deception or confusion on the part of the buying public caused by a product’s false or misleading description or advertising’[8]. Again the plaintiff is in a position to demonstrate to the court that an irreparable harm “occurred, which is in this case was the financial damage and the time lost.

 

 

QUESTION TWO

Against the dealer who gave him the test drive, he should try to resolve his concerns with him. In the first place, he should inform him that he was not happy and, because the dealer was equally involved in the misleading conduct. Forthrightly, the plaintiff should apply to the court for an injunction. Better still, he can visit local offices of Fair Trade, which can help him with local issues of the misleading conduct. The trade offices are likely to provide him with relevant information on how to lodge claims against the dealer. This should be on the grounds that the dealer in the first place was dishonest and created a misleading impression to the plaintiff. Since Mr. Michael may not be the only consumer affected, therefore he should take an immediate action to save those who might fall into the same trap. This can only be done by first taking a legal action against the dealer before even the manufacturer.

 

Accordingly, the conduct of the dealer was unfair as it failed to meet the standard of ‘professional diligence’. Consequently, the dealer lacked skills and care which are reasonably expected of him. Moreover, the dealer had failed to comply with state laws and should therefore; ensure the dealer stops driving down the wrong side of the legal map. In this case, the defendant should be accused of creating a fictions entity and a false sense of urgency. On an honest and ethical ground, the dealer should be aware of the state’s consumer protection laws. As a result, he should have told his employees that the practice was likely to put him into trouble. Furthermore, there are state laws which can allow him sue the dealer, even if the violation was not intentional[9]

 

To add weight to his claim, the dealer failed to provide all information on labels at his selling point. As a dealer, he is supposed to cooperate with government organizations of codes of marketing so as to ensure adequate consumer protection is facilitated. In general by allowing Mr. Michael to drive one of the cars without giving out any information, and only later on to tell him that the competition was not real, the dealer violated his consumer rights. Going by the above arguments, both the manufacturer and the dealer have a case to answer in a court of law.



[1] Weathered Lynne, Trade Marking Celebrity Image: The Impact of Distinctiveness and Use of Trade Mark (2000), Australia, Bond University, Faculty of Law http://www.austlii.edu.au/au/journals/BondLRev/2000/13.html

[2] Johar, Gita, V, Intended and Unintended Effects of Corrective Advertising on Beliefs                          and Evaluations: An Exploratory Analysis” (1996), Journal of Consumer Psychology, 5(3), 210

[3] Goldring, John, Consumer protection law, (1998), Australia, Federation Press, 86.

[4] Katalin, Cseres, Competition law and consumer protection, (2005), Australia, Kluwer Law International, 325

Cristina Coteanu, Cyber consumer law and unfair trading practices, (2005), New York, Ashgate Publishing, Ltd, 154

 

[6]Andreas Heinemann, Thomas MJ, The enforcement of competition law in Europe, (2007), London, Cambridge University Press, 257

 

[7] Wilson, Lee, The Advertising Law Guide: A Friendly Desktop Reference for Advertising Professionals, New York, Allworth Press, 230.

[8] Johar, Gita, “Intended and Unintended Effects of Corrective Advertising on Beliefs and Evaluations: An Exploratory Analysis” (1996), Journal of Consumer Psychology, 5(3), 215.

[9] Goldring, John, Consumer protection law, (1998), Australia, Federation Press, 89

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