Contracts Dr. Delgado, a pediatrician entered into an employment agreement with the All Children’s Hospital.  According to the contract, after termination of her employment for any reas

Consumer Protection.html

Consumer Protection

Consumer transactions take a variety of forms that include acquiring goods, services, or credit for personal or family use. A collection of federal and state laws protects consumers from unfair trade practices, unsafe products, discriminatory or unreasonable credit requirements, and other problems related to consumer transactions.

In today’s consumer market, the extensive use of credit by consumers in the United States has made credit protection an especially important area regulated by the consumer protection legislation. Two significant statutes that regulate the credit and credit card industry are Title I of the Consumer Credit Protection ACT (CCPA) and the Equal Credit Opportunity Act (ECOA).

The Federal Trade Commission (FTC) protects consumers from unfair and deceptive trade practices, including deceptive advertising and certain telemarketing activities. The U.S. Food and Drug Administration (FDA) regulates safety and labeling of food, drugs, and cosmetics. The Consumer Product Safety Commission (CPSC) regulates goods that involve consumer safety such as children’s products.

Since businesses normally provide goods and/or services, managers must have an in-depth knowledge of the consumer protection laws and develop procedures to comply with them.

Some of the most significant statutes regulating the credit and credit-card industry are:

• Title I of the Consumer Credit Protection Act (CCPA)
• Equal Credit Opportunity Act (ECOA)
• Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act)

To deepen your understanding of the concepts introduced in the lecture, consider reading some additional scholarly articles on this topic.  To get you started, review the following articles.    

Butler, H. N., & Wright, J. D. (2011). Are            state consumer protection acts really            little-FTC acts? Florida Law Review,            63(1), 163–191. (Westlaw)

Reagan, R.S. & Thompson, A.M. (2013). Credit CARD Act requirements for gift certificates, store gift cards and general-use prepaid cards. Consumer Compliance Outlook. Retrieved from https://consumercomplianceoutlook.org/2013/first-quarter/credit-card-act-requirements-gift-certicicates-gift-cards-prepaid-cards/

Intellectual Property.html

Intellectual Property

Intellectual property refers to creations of the mind expressed in the form of patents, trademarks, trade names, trade secrets, and copyrights that are protected by federal law.

A copyright grants exclusive right to the publication, production, or sale of the rights to a literary, musical, or artistic work to the creator for a definite period of years. A trademark is a symbol, design, word, letter, etc., used by the owner to distinguish his products from those of competitors. Patents are rights granted to the creator of an invention for the sole right to make, use, or sell the invention for a specified period. A trade secret consists of a business process or information that cannot or should not be patented, copyrighted or trademarked but generally has commercial value.

Protection of intellectual property encourages creativity. Without protection, companies and individuals may not be as willing to invest the resources necessary to create innovative new products that improve and often save lives. Seeking legal protection to prevent unauthorized parties from profiting from a company’s intellectual property is an important priority for any company. Even though most forms of intellectual property are not listed on the balance sheet as assets, the value of such property tends to be reflected in the price of the company's stock, as well as the company’s reputation.

While the most frequent incentives for protection are related to financial issues, there are also reasons related to the health and safety of the consumer. Goods such as pharmaceuticals manufactured and sold by unauthorized parties could be hazardous to consumers’ health because they are not manufactured under the same regulations and processes as the patented or trademarked goods.

Even though the U.S. has well-defined laws for the protection of intellectual property, both domestic and international protection of intellectual property have become increasingly more difficult. Technological advancements and the ability of foreign manufacturers to produce lower-cost goods create almost unlimited opportunities for the distribution of legitimate goods that are authorized by the IPR owner. However, this same technology and low-cost production provide the same opportunities for the distribution of products that infringe on intellectual property rights. For example, anyone with a computer equipped with a CD burner and a stack of discs can illegally copy and distribute popular music and other protected works.

Let’s review a few examples to learn more about intellectual property.

Additional Materials

View the PDF transcript for Intellectual Property Q & A

Contracts.html

Contracts

There are four elements required for a valid contract: agreement, consideration, capacity, and legality. Agreement consists of an offer and acceptance. Consideration is something of legally sufficient value given in exchange for a promise. Contractual capacity requires a competent age and mental state. Contracts to do something prohibited by federal or state statutory law are illegal.

Contracts may be written or oral; however, the statute of frauds requires a writing for contracts involving land, payment of the debt of another, marriage, sale of goods of $500 or more, and those that cannot be performed in one year.

Contracts are regulated by common law except for sales and leases, which are governed by Article 2 of the Uniform Commercial Code (UCC). The UCC is a collection of rules that provide uniformity for resolving issues arising in commercial transactions. A sale of goods is defined as transfer of title to tangible personal property for a price. Article 2 does not cover services, real estate, or gifts. Contracts that include both services and goods are classified according to the dominant element.

Sales of goods in the United States are regulated by Article 2 of the Uniform Commercial Code (UCC). Adopted by most states, the UCC is a collection of suggested laws that provide uniformity for resolving issues that arise in commercial transactions. Article 2 applies to sales between merchants and non-merchants.  A merchant is "a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction" (U.C.C. § 2-104).

International sales of goods are generally governed by the Convention on Contracts for the International Sale of Goods (CISG), which is similar to Article 2 of the UCC. The CISG does not apply to goods purchased for personal or household use, ships or aircraft, securities, negotiable instruments, and goods sold at auction.

The UCC is a complicated compilation of laws.  Let’s examine some of the most important parts of the UCC, with emphasis on the parts related to sales, e-commerce and contracts.

Additional Materials

View the PDF transcript for UCC Provisions

Warranties.html

Warranties

A warranty is a promise by a seller or manufacturer that a product will have certain characteristics or perform in a certain way. Warranties for the sale of goods are found in Article 2 of the UCC. There are two primary types of warranties: express and implied.

An express warranty is explicit guarantee by the seller that the goods have certain qualities or will perform in a certain manner and the buyer purchases the goods based on the seller’s statements. Statements of opinion, also known as puffing, do not constitute a warranty. The statement that a computer monitor has a shatter-proof screen represents an express warranty; however, the statement that the computer monitor is one of the best ever made is puffing and does not constitute an express warranty.

There are two types of implied warranties.  The implied warranty of merchantability consists of  promises made by the seller that the goods are suitable for the ordinary purposes for which they are sold. Keisha purchases a smoothie maker from Target. When Keisha attempts to make her first banana smoothie, the smoothie maker will not crush the small amount of ice needed to make a smoothie; therefore, the product has not performed for the ordinary purpose for which it was sold. 

An implied warranty of fitness for a particular purpose promises that the goods are suitable for the specific purpose for which the seller recommended them and the buyer relies on the seller’s expertise. Don visits New Balance to try on running shoes because he is training for a marathon. Don and the salesperson discuss his use of the shoes. Don purchases a pair of running shoes. Since both parties are aware of the intended use of the shoes, an implied warranty of fitness for a particular purpose exists. If the shoes are not suitable for long distance running, the warranty will be breached.

An implied warranty is a warranty not expressly made by the seller, but inferred at law based on the circumstances or nature of the transaction. The implied warranty automatically arises from merchants for goods sold in his or her course of business (2-314).  The seller warrants that the goods are merchantable, which means the goods (1) are of average, fair or medium grade, (2) adequately packaged and labeled and (3) conform to promises on the label. 

Let’s look at a few examples of implied warranties.

Additional Materials

View the PDF transcript for Implied Warranties