The US Consumer Law - Assignment Example

Commercial Law Questions Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 2/ 08/ 2010 Multiple choice questions 1. C- Economy. 2. B- Limits tort claims to only economic loss. 3. B- The consumer must make a good faith effort to settle with the merchant 4. B- 2 years. 5. D- Stocks and bonds 6. A-Let the buyers beware. 7. B- 50,000. 8. C- American. 9. C- Not call a consumer once the consumer tells the debt collector that the employer does not allow such calls. 10. E- None of the above. 11. A- Owes more than her house is worth. 12. C- Misconduct. 13. D- 60 days. 14. B-Mediation. 15. A- Damages for mental anguish 16. E- More than one of the above 17. A- Attorney's fees 18. B- 30. 19. E- All of the above 20. A- Net worth of the defendant True/False Questions 1. True- the son becomes a consumer once a good or a present is given to him. This is because the Texas Deceptive Trade Practices Act recognizes gifts of goods as good under this law ant the owner of the good is recognized as a consumer, in this case the son is a consumer. 2. True – due to the increase of credit card fraud it is important to review your credit report. Reviews help a card holder to track expenditure and any abnormal expenditure not made by the card holder, he/she can alert his card company for action to be taken. 3. False- the jury in America decide cases based on moral issues and these cases are based on the circumstances of the evidence that make the defendant guilty or innocent. 4. True- when using the proximate cause standard it is difficult to recover damages because it looks at the scenario that led to the person to demand for payment, while in cause standard it is definite what caused the loss thus the defendant can be compensated for damages. 5. True- when conducting online trade it appropriate to use accredit card this is because credit cards have security measures that protect it from fraud and transactions are easier to trace thus it best to use a credit card. 6. True- when filing for costs, excessive costs might lead to the plaintiff’s case to be struck out because excessive cost lead to unrealistic demands from the plaintiff. Cost must be filed and evidence provided for these costs. 7. True – the Strict Products Liability, 402A, only applies for consumers or users, because this law governs on the purchase and use of a good or product. 8. False - the requirement of credit report is not guided by the laws and thus this requirement only differs with the different card companies. These credit reports are guided only by the contract written when acquiring the credit card. 9. True-businesses like consumers also conduct business by buying goods from suppliers. Thus the Texas Deceptive Trade Practices Act recognizes businesses as consumers and thus any business can be recognized as a consumer in Texas. 10. False- this because the UDAP stands for Unfair and Deceptive Acts or Practices. These are laws which guide consumers form unfair and practices conducted against them, while it doesn’t stand for “You don’t Attack Your Professors”. Question A Introduction Today, there are increasing cases of consumers being deceived their money and other possessions in business transaction in United States. In the past, this did go unnoticed by the government; but in 1973 the U.S. enacted the DTPA (Deceptive Trade Practices-Consumer Protection Act) aiming at protecting consumers from misleading, false, and deceptive insurances or business transactions. More so, the act also protects consumer from unconscionable actions and breaches of warranty. The act has remained relevant in prohibiting certain acts and practices that misinform or mislead consumers after being amended several times. The act originated from Texas’ Business and Commercial Code section 17.41. The act is one of the broad and effective deceptive acts which limit all false, misleading and illusory information of the seller by declaring them unlawful and ruling for a huge compensation of up to 3 times of the damages against a guilty defendant. Its aim is to curb unscrupulous business people targeting the naivety of consumers. Discussion Casey’s case is covered by the DTPA which recognizes her as a consumer who has been violated by the seller of the house. Under DTPA, any misinformation to the consumer which is deceptive and misleading or any act considered unconscionable practice in any trade is unlawful. Casey has various claims to bring forward over the seller who sold to her a house in Texas. The advantage that Casey has is that DTPA has explicitly outlined a number of practices which are illegal and do not require evidence or proof on defendant acts. In some cases, the consumer is not even required to give evidence in court of law, especially if the case is portrayed by the Judge as being intended or with forethought of deception. Under this act a consumer is a person, a firm, a corporate, enterprise or a government agency that seek to acquire any property through buying or leasing among others. Casey has the right to claim for the damages she underwent through buying of her property. Under DTPA there is “laundry list” located in section17.49 (b) of the Texas Business and Commercial Code containing specific acts and practices which prohibits unlawful acts against the consumer. The act states that failure of the seller to disclose information which is relevant for consumer to making informed decision on whether to buy or not goods or service may lead to a fine in the court of law. In our case, the real estate owner failed to disclose that her mother had been brutally murdered in the house which was the reason behind selling the house. By withholding this information, the seller committed unconscionable act against the consumer. This act is punishable under the law, and therefore, Casey is entitled to seek for compensation of the damages she suffered. Casey can claim damages for mental anguish due to the fact she had nightmares and consequently lost her job. She can claim recovery for economic damages since the seller’s actions led to losing her job depriving her economic income. While advertising the house and at the time of the business transaction, the seller should have given the right price on the cost of the house instead of using misleading information. The house was being sold at $ 300,000 which was a price far less than the actual price of the house, thus the act of being sold the house cheaply amounts to deception. Here, the consumer should claim for the deficit incurred when selling and if she intends to sale the house, the seller will be required to cater for loss, deficit or any other expenses incurred by the consumer. The quality of the house was questionable after buying, the seller had decided to sale the house after her mother had been brutally murdered in the house. The house appeared new after it was painted, however by concealing the information about the house consumer never noticed until a neighbour disclosed the murder of the seller’s mother. According to DTPA, the act of presenting goods and services as if they are of high quality contradicting the truth is unlawful. The house was of less quality as opposed to what the seller claimed, because of this, Casey is liable to claim for compensation. By overprizing the house, the seller deceived consumer on the real value of the house. Here, Casey should ask for compensation for the economic loss she suffered. When advertising a property such as a house in this case, the seller is expected to reveal all the substantial information that will influence consumer’s decision making process. Under the act, if the information provided is misleading, the consumer should be compensated by the seller upon a court ruling. In this case, Casey has a claim against the advert and the sale of the house since the entire process was fraudulent. As per the provisions of the act, the damages can a three times higher than the damages suffered by the plaintiff. A case like this is usually presented to the court after giving a caution letter to the defendant in 60 days before filing the case in court, to larger extent the claimant will prevail in this case. If Casey prevails in this case as evident from the acts provisions, she is able to recover the following damages: three times all amount incurred she incurred (cost of losing the job, cost of the house, among others), plus the entire amount incurred in the court case and reasonable attorney fees. Casey will also be compensated for the mental anguish that she suffered upon the discovery of the trickery on the part of the seller. Lastly, under DTPA, Casey will be able to recover all the damages incurred as underlined in the Uniform Consumer Code. This is due to the comprehensive nature of the act, it is able to protect consumer from dishonest real estate business owner, seller, contract, and any other parties that have conducted unconscionable acts against the consumer. Under some circumstances consumer’s evidences are not required as long as the court finds that the defendant had bad intentions on deceiving the consumer. Question B Introduction Most people in U.S. are usually mistreated by collection agencies in their bid to collect debt from debtor. In such situations people’s rights are abused either due to ignorance or other reasons. In order to protect such people, Fair Debt Collection Practice Act (FDCPA) was enacted by the government with an aim of protecting consumers from unfair and unethical practices of debt collection agencies who for many years have abused the rights of many American Citizens. It laid down rules, regulation and formalities that collection agencies were to follow in order to limit them from harassing consumers when they fail to pay their debts. Today the act targets individuals, households, firms, families and corporation among others. The act laid down effective rules and regulations that were to be followed by the collection agencies, some of these rules were: they were not to call the debtor at unreasonable times unless they got permission from the debtor; they were not to call third parties and the only persons allowed by the law to be involved are the debtor co-signees, his attorney and the creditor’s attorney. They were not also supposed make demands beyond the agreed contract and were not permitted to evacuate anyone from their residential place. Discussion Casey has various claims under Fair Debt Collection Practices Act over her case against the collection agencies. First, RGM writing a letter threatening Casey was unlawful, since the sheriff can only be commanded by the court to arrest the debtor, for that reason, their conduct was uncalled for and through litigation the claimant will be compensated. In 2009 cases against debt collectors raised to 46.5% which was high than previous years and is still expected to go up according to report by the Federal Trade Commission. FDCPA prohibits the debt collection agencies from threatening a debtor with arrest allegations; such conduct is unlawful as it intimidates a debtor. It is only the judge in the courts of law who could declare an arrest against any defaulter, if this is done by any other person or party, it becomes illegal. The conduct shown by RGM is prohibited by FDCPA which states that the debt collector should not threaten the debtor with arrest of any kind even if he/she fails to pay the debt. For this reason, RGM stands no ground to send a warrant of arrest to the debtor who fails to meet the debt payment as agreed during signing of contract. It is estimated that over 20% of FDCPA violations are complaints by consumer being threatened with dire consequences by debt collectors. Such collection agencies ought to follow the law when executing its mandate to avoid conflicting with the law. In 2009 almost 13% of debt collectors contracted third parties in the United States. The act prohibits debt collector or collection agencies from involving third party or any other person who is not permitted by the act or is not co-signer of the debtor. The act only permits various parties to be involved and they are; debtor’s attorney, debtor, creditor, creditor’s attorney and debtor’s co-signer (Richard, 2004). In this case GBH and RGM in their demand for the oven and T.V engaged Casey’s mother and father. They also used abusive language on Casey’s parent as a result of their daughters payment default. In this case, Casey has various claims over both agencies; first the agencies contacted the parents without the consent of the Casey (the consumer), this is amounts to disclosure of private information to third parties. The second claim is based on the fact that they used abusive and profane language on Casey’s parent; they wrongfully accused her of being a criminal for not paying the debt on time. As per the provisions of the FDCPA, if Casey’s attorney presents the case, it is highly likely that Casey will prevail. According to FDCPA, a collection agency should never threaten any one with evacuation from their residential place. GBH acted unethical and unlawful by writing a letter to Casey with evacuation threats; they threatened to evacuate her if she failed to settle the debt in a period of 30 days. In this situation Casey is liable for damages that occurred as a result of the threats that she received from the two company’s GBH and RGM. In this case Casey can ask the court to take legal measures against these agencies for their unprofessional practices. Section 806 of the FDCPA prohibits debt collectors from oppressing, harassing or abusing the debtor in the process of debt collection. It also prohibits debt collectors from harming the consumer physically, or harming the consumer’s reputation or property. Casey can claim damages that generated nightmares and lack of appetite. The collection agencies demanded their pay without evaluating the condition of the consumer. According to Richard (2004) the act protects consumer against debt collectors especially when the consumer is experiencing bankruptcy. The act is thus meant to safeguard the consumer in such situations. Upon the final court decision, Casey will be in a position to recover three times the cost that she incurred in order for her to settle legal costs, attorney’s fee she incurred and other expenses that resulted in the process. FDCPA thus provides a basis in which RGM and GBH can be made liable for the damages that resulted from their unethical and unlawful actions. Casey ought to file the case within a period of two years in order for the process to be successful. Question C Introduction Road accidents in the United States are among the leading cause of deaths. Most of the accidents result from irresponsible driving and faulty vehicles. The United States government spends billions of US dollars in preventive measures, with an aim of curbing increased road accidents; this process has not been fully successful because of other external contributing factors. Most states in the U.S. have enacted laws that prevents road unworthy vehicles from operating in the highways. Despite these measures that the state has taken, the rate of accidents is yet to significantly decline. Some of the common causes of accidents in the United States are due to faults from manufacturing companies, careless driving and driving under the influence of alcohol (Alderman, 2003). Discussion In a situation where an accident is attributed to the automaker of either the vehicle or auto spare parts, a product liability lawsuit is filed against the auto manufacturer or the suppliers. The manufacturer becomes responsible for any damages incurred in the course of accident, regardless of the driver’s carelessness that was partly contributed by a defective vehicle. Some of the most common manufacturer’s mistakes include defective airbags, defective tires and defective breaking system. Toyota Company is thus liable for the damages that Mary be incurred after the accident. Because the faulty vehicle contributed to the accident, the cost of treatment and property loss (i.e. the computer in this case), the law provides that other damages that were as a result of the accident such as economic loss and the deficit that accrued as a result of the car sale should be compensated by Toyota. In Mary’s and Bob’s case the two are liable to compensation but under different situations. The car Mary bought had defective accelerator pedal that lead to Mary being involved in a road accident; such scenarios are usually treated with laws such as the Universal Commercial Code (UCC), which in section 2 guides on sale of products. Section 2-508 of the UCC touches on the non-conformance of products, it explains that if a product does no conform to its qualities the buyer can notify the seller within reasonable grounds. In Mary’s case she has a right to claim for payment against Toyota Corporation for the vehicle she bought did not conform to it qualities during its use thus Toyota is liable to damages which Mary suffered in the accident. Mary’s lawyer’s could argue that section 2-510 of the UCC, clarifies that if a tender or a product does not conform to product specifications then rejection an loss lies with the buyer. In our case we see that the Toyota 2010 vehicle bought by Mary did not conform to certain qualities and Mary has a right to reject the vehicle and Toyota Corporation will ne liable for the loss. With this reason Mary has a right to be compensated for all the injuries she suffered during the car crash since the vehicle and she should be refunded the money she bought the car with. In Bob’s case we see that upon rejection of the Toyota 2010 car, he was refunded $ 2,000 less what he was supposed to be paid. Section 2-608 of the UCC states that if the rejection of a certain product due to non-conformity affects the price of the product the buyer has a right for rejection. Using this reason Bob has a right to claim for compensation and that Toyota has to pay him the correct price for his Toyota 2010 vehicle due to the non-conformity of this vehicle. Using section 2 of the UCC, Mary lawyers could argue that this section explains that product warranties must be respected and that any product that does not meet its warranty the seller will be liable for the product or loss. In this case Mary and Bob have a claim against Toyota Corporation for the accident and non-conformity for their vehicles and they must be compensated for the losses they incurred up to a reasonable degree. In summary, consumer laws such as DTPA and UCC are meant to protect consumer against exploitation from the producer or from faulty products or services procured to them. In the case of Mary and Bob, they must be compensated for their faulty Toyota 2010. In Mary’s case, we see that the vehicle she bought had faults in it that led to serious injuries to her in an accident. Thus she has a right to claim for compensation and if she wins the case the law courts might award her cost she suffered form the accident, legal costs and any other miscellaneous loss she suffered in this case the computer and psychiatric costs to recover from the effects of the accident. While Bob might be awarded the extra $ 2,000 he demands and cost of the lawsuit in case he wins his case, which might is very likely comparing the scenario the accident happened. References Alderman., Richard F.,& William D.(2003). A transactional guide to the Uniform commercial code.New York,NY: American Law Institute-American Bar Association Committee on Continuing Professional Education. Richard, M. Alderman. (2004). Texas deceptive trade practices: cases and materials. Texas,TX: John Marshall Pub. Co. Read More